Abstract: Lithium is the smallest monovalent cation with many different biological effects. Although lithium is present in the pharmacotherapy of psychiatric illnesses for decades, its precise mechanism of action is still not clarified. Today lithium represents first-line therapy for bipolar disorders (because it possesses both antimanic and antidepressant properties) and the adjunctive treatment for major depression (due to its antisuicidal effects). Beside, lithium showed some protective effects in neurological diseases including acute neural injury, chronic degenerative conditions, Alzheimer's disease as well as in treating leucopenia, hepatitis and some renal diseases. Recent evidence suggested that lithium also possesses some anticancer properties due to its inhibition of glycogen synthase kinase 3 beta (GSK3β) which is included in the regulation of a lot of important cellular processes such as: glycogen metabolism, inflammation, immunomodulation, apoptosis, tissue injury, regeneration etc. Although recent evidence suggested a potential utility of lithium in different conditions, its broader use in clinical practice still trails. The reason for this is a narrow therapeutic index of lithium, numerous toxic effects in various organ systems and some clinically relevant interactions with other drugs. Additionally, it is necessary to perform more preclinical as well as clinical studies in order to a precise therapeutic range of lithium, as well as its detailed mechanism of action. The aim of this review is to summarize the current knowledge concerning the pharmacological and toxicological effects of lithium.