Lithium has been used in the treatment of bipolar disorders for decades, but the exact mechanisms of action remain elusive to this day. Recent evidence suggests that lithium is critically involved in a variety of signaling pathways affecting apoptosis, inflammation, and neurogenesis, all of which contributing to the complex pathophysiology of various neurological diseases. As a matter of fact, preclinical work reports both acute and long-term neuroprotection in distinct neurological disease models such as Parkinson’s disease, traumatic brain injury, Alzheimer’s disease, and ischemic stroke. Lithium treatment reduces cell injury, decreases α-synuclein aggregation and Tau protein phosphorylation, modulates inflammation and even stimulates neuroregeneration under experimental conditions of Parkinson’s disease, traumatic brain injury, and Alzheimer’s disease. The therapeutic impact of lithium under conditions of ischemic stroke was also studied in numerous preclinical in vitro and in vivo studies, giving rise to a randomized double-blind clinical stroke trial. The preclinic data revealed a lithium-induced upregulation of anti-apoptotic proteins such as B-cell lymphoma 2, heat shock protein 70, and activated protein 1, resulting in decreased neuronal cell loss. Lithium, however, does not only yield postischemic neuroprotection but also enhances endogenous neuroregeneration by stimulating neural stem cell proliferation and by regulating distinct signaling pathways such as the RE1-silencing transcription factor. In line with this, lithium treatment has been shown to modulate postischemic cytokine secretion patterns, diminishing microglial activation and stabilizing blood-brain barrier integrity yielding reduced levels of neuroinflammation. The aforementioned observations culminated in a first clinical trial, which revealed an improved motor recovery in patients with cortical stroke after lithium treatment. Beside its well-known psychiatric indications, lithium is thus a promising neuroprotective candidate for the aforementioned neurological diseases. A detailed understanding of the lithium-induced mechanisms, however, is important for prospective clinical trials which may pave the way for a successful bench-to-bedside translation in the future. In this review, we will give an overview of lithium-induced neuroprotective mechanisms under various pathological conditions, with special emphasis on ischemic stroke.