Lithium is the most effective and well established treatment for bipolar disorder, and it has a broad array of effects within cellular pathways. However, the specific processes through which therapeutic effects occur and are maintained in bipolar disorder remain unclear. This paper provides a timely update to an authoritative review of pertinent findings that was published in CNS Drugs in 2013. A literature search was conducted using the Scopus database, and was limited by year (from 2012). There has been a resurgence of interest in lithium therapy mechanisms, perhaps driven by technical advancements in recent years that permit the examination of cellular mechanisms underpinning the effects of lithium-along with the reuptake of lithium in clinical practice. Recent research has further cemented glycogen synthase kinase 3β (GSK3β) inhibition as a key mechanism, and the inter-associations between GSK3β-mediated neuroprotective, anti-oxidative and neurotransmission mechanisms have been further elucidated. In addition to highly illustrative cellular research, studies examining higher-order biological systems, such as circadian rhythms, as well as employing innovative animal and human models, have increased our understanding of how lithium-induced changes at the cellular level possibly translate to changes at behavioural and clinical levels. Neural circuitry research is yet to identify clear mechanisms of change in bipolar disorder in response to treatment with lithium, but important structural findings have demonstrated links to the modulation of cellular mechanisms, and peripheral marker and pharmacogenetic studies are showing promising findings that will likely inform the exploration for predictors of lithium treatment response. With a deeper understanding of lithium's therapeutic mechanisms-from the cellular to clinical levels of investigation-comes the opportunity to develop predictive models of lithium treatment response and identify novel drug targets, and recent findings have provided important leads towards these goals.