Lithium and other mood-stabilizing drugs are used for the management of bipolar mood disorders and, to a lesser extent, for augmentation of other psychoactive drugs. Lithium also has neuroprotective properties that may be useful for treatment of neurodegenerative diseases such as Alzheimer's disease and amyotrophic lateral sclerosis. Over the years, lithium has been shown to inhibit inositol monophosphatases and glycogen synthase kinase 3, but the relevance of such enzyme inhibition to the therapeutic effects of lithium has remained difficult to assess. Here, we provide an overview of recent advances in the identification of molecular mechanisms involved in the regulation of behavior by lithium. We also highlight recent findings suggesting that lithium could exert some of its behavioral effects by acting on a dopamine receptor regulated signaling complex composed of Akt, protein phosphatase 2A, and the multifunctional protein scaffold beta-arrestin 2.