The evolution of lithium therapy for the treatment of mania and depression, from its discovery to the present day, is described. Early problems with toxicity have been overcome and lithium is now established as a safe medication, provided serum levels are monitored. The mechanism of action of lithium is not yet known, but biochemical models are beginning to be put forward. Lower doses of lithium than were previously used are now recommended. Treatment with intermittent doses of lithium (every second day) seems to reduce side effects, while maintaining clinical efficacy. Lithium has recently been used in combination with other medications. Augmentation of unsuccessful antidepressant treatment with lithium may produce an antidepressant effect within a short time. Withdrawal from lithium therapy usually results in a relapse. Lithium treatment is also used outside psychiatry. Other potential clinical applications for lithium therapy are discussed.