Increasing data indicate that inflammation and alterations in glutamate neurotransmission are two novel pathways to pathophysiology in mood disorders. The primary goal of this review is to illustrate how these two pathways may converge at the level of the glia to contribute to neuropsychiatric disease. We propose that a combination of failed clearance and exaggerated release of glutamate by glial cells during immune activation leads to glutamate increases and promotes aberrant extrasynaptic signaling through ionotropic and metabotropic glutamate receptors, ultimately resulting in synaptic dysfunction and loss. Furthermore, glutamate diffusion outside the synapse can lead to the loss of synaptic fidelity and specificity of neurotransmission, contributing to circuit dysfunction and behavioral pathology. This review examines the fundamental role of glia in the regulation of glutamate, followed by a description of the impact of inflammation on glial glutamate regulation at the cellular, molecular, and metabolic level. In addition, the role of these effects of inflammation on glia and glutamate in mood disorders will be discussed along with their translational implications.