Multiple sclerosis (MS) is the most common chronic central nervous system inflammatory disease. Individual courses are highly variable, with complete remission in some patients and relentless progression in others. We generated induced pluripotent stem cells (iPSCs) to investigate possible mechanisms in benign MS (BMS), compared with progressive MS (PMS). We differentiated neurons and astrocytes that were then stressed with inflammatory cytokines typically associated with MS phenotypes. TNF-α/IL-17A treatment increased neurite damage in MS neurons from both clinical phenotypes. In contrast, TNF-α/IL-17A–reactive BMS astrocytes cultured with healthy control neurons exhibited less axonal damage compared with PMS astrocytes. Accordingly, single-cell transcriptomic BMS astrocyte analysis of cocultured neurons revealed upregulated neuronal resilience pathways; these astrocytes showed differential growth factor expression. Furthermore, supernatants from BMS astrocyte/neuronal cocultures rescued TNF-α/IL-17–induced neurite damage. This process was associated with a unique LIF and TGF-β1 growth factor expression, as induced by TNF-α/IL-17 and JAK-STAT activation. Our findings highlight a potential therapeutic role of modulation of astrocyte phenotypes, generating a neuroprotective milieu. Such effects could prevent permanent neuronal damage.