Increasing evidence indicates lithium (Li) efficacy in neuropsychiatry, pointing to overlapping mechanisms that occur within distinct neuronal populations. In fact, the same pathway depending on which circuitry operates may fall in the psychiatric and/or neurological domains. Li restores both neurotransmission and brain structure unveiling that psychiatric and neurological disorders share common dysfunctional molecular and morphological mechanisms, which may involve distinct brain circuitries. Here an overview is provided concerning the therapeutic/neuroprotective effects of Li in different neuropsychiatric disorders to highlight common molecular mechanisms through which Li produces its mood-stabilizing effects and to what extent these overlap with plasticity in distinct brain circuitries. Li mood-stabilizing effects are evident in typical bipolar disorder (BD) characterized by a cyclic course of mania or hypomania followed by depressive episodes, while its efficacy is weaker in the opposite pattern. We focus here on neural adaptations that may underlie psychostimulant-induced psychotic development and to dissect, through the sensitization process, which features are shared in BD and other psychiatric disorders, including schizophrenia. The multiple functions of Li highlighted here prove its exceptional pharmacology, which may help to elucidate its mechanisms of action. These may serve as a guide toward a multi-drug strategy. We propose that the onset of sensitization in a specific BD subtype may predict the therapeutic efficacy of Li. This model may help to infer in BD which molecular mechanisms are relevant to the therapeutic efficacy of Li.