Lithium has been a gold standard in the treatment of bipolar disorder (BD) for several decades. Despite a general reduction in the use of lithium over the past several years, it is effective in the management of both manic and depressive episodes in BD and continues to be recommended as a first-line mood stabilizer. This review provides an overview of the pharmacology of lithium and highlights its clinical profile in the management of BD, focusing on the potential advantages of prolonged-release (PR) versus immediate-release (IR) formulations of lithium. A literature search using PubMed was performed to identify articles describing IR and PR lithium in BD using specific search terms like 'lithium', 'prolonged-release', 'sustained-release', 'extended-release', 'bipolar disorder', 'adherence' and 'compliance'. Relevant pharmacodynamic and pharmacokinetic data were also included. Several clinical trials suggested that lithium is effective in the treatment of acute mania and prophylaxis of BD and reduces the risk of suicide in patients with BD; it may also be used in combination with other drugs in the treatment of bipolar depression. Treatment with lithium must be monitored to avoid lithium-associated toxicity. The prolonged PR formulation of lithium has several advantages including consistent serum lithium concentrations, fewer adverse events and improved adherence to therapy. Although direct comparative studies between PR and IR formulations of lithium are primarily limited to pharmacokinetic studies, PR formulation of lithium provides potential advantages over IR formulation and can be effectively used in the management of BD with lesser adverse events.