The potential role of astrocytes in lateral habenula (LHb) in modulating anxiety was explored in this study. The habenula are a pair of small nuclei located above the thalamus, known for their involvement in punishment avoidance and anxiety. Herein, we observed an increase in theta-band oscillations of local field potentials (LFPs) in the LHb when mice were exposed to anxiety-inducing environments. Electrical stimulation of LHb at theta-band frequency promoted anxiety-like behavior. Calcium (Ca2+) levels and pH in the cytosol of astrocytes and local brain blood volume changes were studied in mice expressing either a Ca2+ or a pH sensor protein specifically in astrocytes and mScarlet fluorescent protein in the blood plasma using fiber photometry. An acidification response to anxiety was observed. Photoactivation of archaerhopsin-T (ArchT), an optogenetic tool that acts as an outward proton pump, results in intracellular alkalinization. Photostimulation of LHb in astrocyte-specific ArchT-expressing mice resulted in dissipation of theta-band LFP oscillation in an anxiogenic environment and suppression of anxiety-like behavior. These findings provide evidence that LHb astrocytes modulate anxiety and may offer a new target for treatment of anxiety disorders.