This Review evaluates the arachidonic acid (AA, 20:4n-6) cascade hypothesis for the actions of lithium and other FDA-approved mood stabilizers in bipolar disorder (BD). The hypothesis is based on evidence in unanesthetized rats that chronically administered lithium, carbamazepine, valproate, or lamotrigine each downregulated brain AA metabolism, and it is consistent with reported upregulated AA cascade markers in post-mortem BD brain. In the rats, each mood stabilizer reduced AA turnover in brain phospholipids, cyclooxygenase-2 expression, and prostaglandin E2 concentration. Lithium and carbamazepine also reduced expression of cytosolic phospholipase A2 (cPLA2) IVA, which releases AA from membrane phospholipids, whereas valproate uncompetitively inhibited in vitro acyl-CoA synthetase-4, which recycles AA into phospholipid. Topiramate and gabapentin, proven ineffective in BD, changed rat brain AA metabolism minimally. On the other hand, the atypical antipsychotics olanzapine and clozapine, which show efficacy in BD, decreased rat brain AA metabolism by reducing plasma AA availability. Each of the four approved mood stabilizers also dampened brain AA signaling during glutamatergic NMDA and dopaminergic D2 receptor activation, while lithium enhanced the signal during cholinergic muscarinic receptor activation. In BD patients, such signaling effects might normalize the neurotransmission imbalance proposed to cause disease symptoms. Additionally, the antidepressants fluoxetine and imipramine, which tend to switch BD depression to mania, each increased AA turnover and cPLA2 IVA expression in rat brain, suggesting that brain AA metabolism is higher in BD mania than depression. The AA hypothesis for mood stabilizer action is consistent with reports that low-dose aspirin reduced morbidity in patients taking lithium, and that high n-3 and/or low n-6 polyunsaturated fatty acid diets, which in rats reduce brain AA metabolism, were effective in BD and migraine patients.