Amyotrophic lateral sclerosis (ALS) is a fatal and incurable neurodegenerative disease caused by motor neuron loss, resulting in muscle wasting, paralysis and eventual death. A key pathological feature of ALS is cytoplasmically mislocalized and aggregated TDP-43 protein in >95% of cases, which is considered to have prion-like properties. Historical studies have predominantly focused on genetic forms of ALS, which represent ∼10% of cases, leaving the remaining 90% of sporadic ALS relatively understudied. Additionally, the role of astrocytes in ALS and their relationship with TDP-43 pathology is also not currently well understood. We have therefore used highly enriched human induced pluripotent stem cell (iPSC)-derived motor neurons and astrocytes to model early cell type-specific features of sporadic ALS. We first demonstrate seeded aggregation of TDP-43 by exposing human iPSC-derived motor neurons to serially passaged sporadic ALS post-mortem tissue (spALS) extracts. Next, we show that human iPSC-derived motor neurons are more vulnerable to TDP-43 aggregation and toxicity compared with their astrocyte counterparts. We demonstrate that these TDP-43 aggregates can more readily propagate from motor neurons into astrocytes in co-culture paradigms. We next found that astrocytes are neuroprotective to seeded aggregation within motor neurons by reducing (mislocalized) cytoplasmic TDP-43, TDP-43 aggregation and cell toxicity. Furthermore, we detected TDP-43 oligomers in these spALS spinal cord extracts, and as such demonstrated that highly purified recombinant TDP-43 oligomers can reproduce this observed cell-type specific toxicity, providing further support to a protein oligomer-mediated toxicity hypothesis in ALS. In summary, we have developed a human, clinically relevant, and cell-type specific modelling platform that recapitulates key aspects of sporadic ALS and uncovers both an initial neuroprotective role for astrocytes and the cell type-specific toxic effect of TDP-43 oligomers. © The Author(s) (2020). Published by Oxford University Press on behalf of the Guarantors of Brain.