Glial cells respond to neuronal activation and release neuroactive molecules (termed "gliotransmitters") that can affect synaptic activity and modulate plasticity. In this study, we used molecular genetic tools, ultra-structural microscopy, and electrophysiology to assess the role of brain-derived neurotrophic factor (BDNF) on cortical gliotransmission in vivo. We find that glial cells recycle BDNF that was previously secreted by neurons as pro-neurotrophin following long-term potentiation (LTP)-inducing electrical stimulation. Upon BDNF glial recycling, we observed tight, temporal, highly localized TrkB phosphorylation on adjacent neurons, a process required to sustain LTP. Engagement of BDNF recycling by astrocytes represents a novel mechanism by which cortical synapses can expand BDNF action and provide synaptic changes that are relevant for the acquisition of new memories. Accordingly, mice deficient in BDNF glial recycling fail to recognize familiar from novel objects, indicating a physiological requirement for this process in memory consolidation.