The treatment of bipolar disorder has seen greater innovation in the past decade than at any other time since the introduction of lithium and the neuroleptics a half-century ago. The place of lithium in contemporary psychiatric therapeutics has become controversial, calling for the present overview of research findings pertaining to its use in treating patients with bipolar disorder. Lithium, by itself, typically is inadequate for rapid control of acute mania; antipsychotics, divalproex, or potent sedatives are commonly used, with or without lithium, for this purpose. The special usefulness of lithium lies in long-term prevention of recurrences of mania and bipolar depression and in reducing risk of suicidal behavior. Lithium also may be beneficial in recurrent unipolar depression and is an effective adjunct for treatment-resistant depression. Expectations that prolonged untreated bipolar illness, multiple episodes, rapid cycling, or retreatment following discontinuation might routinely lead to lithium nonresponsiveness, and the belief that lithium is too toxic for use during pregnancy, have not been borne out by research. Lithium retains a substantial share of prescriptions for bipolar disorder and is inexpensive. No other treatment has performed as well as lithium in as many aspects of long-term care of bipolar disorder patients, and despite some risks and limitations, lithium remains the standard against which all proposed alternatives are compared.