Evidence suggests that mitochondrial dysfunction is present in patients with bipolar disorder.[72] Oxidative stress and reduced levels of anti-oxidants (such as glutathione) lead to cell death. Lithium may protect against oxidative stress by up-regulating complex I and II of the mitochondrial electron transport chain.

During mania, there is an increase in neurotransmission of dopamine that causes a secondary homeostatic down-regulation, resulting in decreased neurotransmission of dopamine, which can cause depression.[72] Additionally, the post-synaptic actions of dopamine are mediated through G-protein coupled receptors. Once dopamine is coupled to the G-protein receptors, it stimulates other secondary messenger systems that modulate neurotransmission. Studies found that in autopsies (which do not necessarily reflect living people), people with bipolar disorder had increased G-protein coupling compared to people without bipolar disorder.[72] Lithium treatment alters the function of certain subunits of the dopamine associated G-protein, which may be part of its mechanism of action.

Glutamate levels are observed to be elevated during mania. Lithium is thought to provide long-term mood stabilization and have anti-manic properties by modulating glutamate levels.[72] It is proposed that lithium competes with magnesium for binding to NMDA glutamate receptor, increasing the availability of glutamate in post-synaptic neurons.[72] The NMDA receptor is also affected by other neurotransmitters such as serotonin and dopamine. Effects observed appear exclusive to lithium and have not been observed by other monovalent ions such as rubidium and caesium.

GABA is an inhibitory neurotransmitter that plays an important role in regulating dopamine and glutamate neurotransmission.[72] It was found that patients with bipolar disorder had lower GABA levels, which results in excitotoxicity and can cause apoptosis (cell loss). Lithium has been shown to increase the level of GABA in plasma and cerebral spinal fluid.[74] Lithium counteracts these degrading processes by decreasing pro-apoptotic proteins and stimulating release of neuroprotective proteins.[72] Lithium's regulation of both excitatory dopaminergic and glutamatergic systems through GABA may play a role in its mood stabilizing effects.

Lithium's therapeutic effects are thought to be partially attributable to its interactions with several signal transduction mechanisms.[76][77] The cyclic AMP secondary messenger system is shown to be modulated by lithium. Lithium was found to increase the basal levels of cyclic AMP but impair receptor coupled stimulation of cyclic AMP production.[72] It is hypothesized that the dual effects of lithium are due to the inhibition of G-proteins that mediate cyclic AMP production.[72] Over a long period of lithium treatment, cyclic AMP and adenylate cyclase levels are further changed by gene transcription factors.

Lithium treatment has been found to inhibit the enzyme inositol monophosphatase, involved in degrading inositol monophosphate to inositol required in PIP2 synthesis. This leads to lower levels of inositol triphosphate, created by decomposition of PIP2.[78] This effect has been suggested to be further enhanced with an inositol triphosphate reuptake inhibitor. Inositol disruptions have been linked to memory impairment and depression. It is known with good certainty that signals from the receptors coupled to the phosphoinositide signal transduction is affected by lithium.[79] myo-inositol is also regulated by the high affinity sodium mI transport system (SMIT). Lithium is hypothesized to inhibit mI entering the cells and mitigating the function of SMIT.[72] Reductions of cellular levels of myo-inositol results in the inhibition of the phosphoinositide cycle.