The high rate of non-responders to initial treatment with antidepressants requires subsequent treatment strategies such as augmentation of antidepressants. Clinical guidelines recommend lithium augmentation as a first-line treatment strategy for non-responding depressed patients. The objectives of this review were to discuss the current place of lithium augmentation in the management of treatment-resistant depression and to review novel findings concerning lithium's mechanisms of action. We conducted a comprehensive and critical review of randomized, placebo-controlled trials, controlled and naturalistic comparator studies, and continuation-phase and discontinuation studies of lithium augmentation in major depression. The outcomes of interest were efficacy, factors allowing outcome prediction and results from preclinical studies investigating molecular mechanisms of lithium action. Substantial efficacy of lithium augmentation in the acute treatment of major depression has been demonstrated in more than 30 open-label studies and 10 placebo-controlled trials. In a meta-analysis addressing the efficacy of lithium in 10 randomized, controlled trials, it had a significant positive effect versus placebo, with an odds ratio of 3.11 corresponding to a number-needed-to-treat (NNT) of 5 and a mean response rate of 41.2% (versus 14.4% in the placebo group). The main limitations of these studies were the relatively small numbers of study participants and the fact that most studies included augmentation of tricyclic antidepressants, which are not in widespread use anymore. Evidence from continuation-phase studies is sparse but suggests that lithium augmentation should be maintained in the lithium-antidepressant combination for at least 1 year to prevent early relapses. Concerning outcome prediction, single studies have reported associations of better outcome rates with more severe depressive symptomatology, significant weight loss, psychomotor retardation, a history of more than three major depressive episodes and a family history of major depression. Additionally, one study suggested a predictive role of the -50T/C single nucleotide polymorphism of the glycogen synthase kinase 3 beta (GSK3B) gene in the probability of response to lithium augmentation. With regard to novel mechanisms of action, GABAergic, neurotrophic and genetic effects might explain the effects of lithium augmentation. In conclusion, augmentation of antidepressants with lithium remains a first-line, evidence-based management option for patients with major depression who have not responded adequately to antidepressants. While the mechanisms of action are currently widely studied, further clinical research on the role of lithium potentiation of the current generation of antidepressants is warranted to reinforce its role as a gold-standard treatment for patients who respond inadequately to antidepressants.