Atypical antipsychotics have an important role in the acute and maintenance treatment of bipolar disorder. While robust evidence supports the efficacy of these agents in the treatment of mania and in the prevention of manic relapse, few atypical antipsychotics have shown efficacy in the treatment or prevention of depressive episodes. These agents pose a lower risk of extrapyramidal side effects compared to typical neuroleptics, but carry a significant liability for weight gain and other metabolic side effects such as hyperglycemia and hyperlipidemia. More comparative effectiveness studies are needed to assess the optimal treatment regimens, including the relative benefits and risks of antipsychotics versus mood stabilizers. The exploration of the molecular mechanisms of antipsychotics has helped to shed further light on the underlying neurobiology of bipolar disorder, since these compounds target systems thought to be key to the pathophysiology of bipolar disorder. In addition to modulating monoaminergic neurotransmission, atypical antipsychotics appear to share properties with mood-stabilizing agents known to alter intracellular signal transduction leading to changes in neuronal activity and gene expression. Atypical antipsychotic drugs have been shown to exhibit neuroprotective properties that are mediated by upregulation of trophic and cellular resilience factors. Building on our understanding of existing therapeutics, especially as it relates to underlying disease pathology, newer "plasticity enhancing" strategies hold promise for future treatments of bipolar disorder.