Lithium (Li) reduces brain inositol levels by inhibiting the enzyme inositol monophosphatase. The enzyme inositol-1-phosphatase was measured in human red blood cells of controls, Li-free bipolar patients, and Li-treated bipolar patients and was found to be reduced by 80% in Li-treated bipolars, thus supporting the concept that chronic Li at therapeutic concentrations inhibits this enzyme. Two behaviors in rats caused by Li, reduction of rearing, and Li-pilocarpine seizures, are reversed by intracerebroventricular replenishment of inositol. The reversal is stereospecific to the naturally occurring myo-inositol; whereas the stereoisomer L-chiro-inositol is ineffective. The reversal is dose-dependent, requiring a dose consistent with known quantities of brain inositol depletion; and is time-dependent, as inositol must be given 1-8 h before stimulation. High-dose peripheral inositol also reverses the limbic seizures induced by Li-pilocarpine, and using gas chromatography was shown to increase brain inositol levels that had been reduced by Li treatment. Low-dose inositol could be shown to reverse a peripheral Li-induced side effect, polyuria/polydipsia, in rats and in patients treated with Li. A higher dose of inositol markedly reduced Hamilton Depression Ratings in 9 of 11 unipolar major depressive disorder patients previously unresponsive to tricyclics, in an open design, but had no effect on chronic schizophrenics in a controlled double-blind randomized crossover trial. A new inositol monophosphatase inhibitor, a fungal product originally discovered as a complement inhibitor, was found to act like Li and lower the seizure threshold for subconvulsant doses of pilocarpine. These data suggest that inositol monophosphatase inhibition is a key mechanism of Li's therapeutic action and that design of new inositol monophosphatase inhibitors may be a practical strategy to create new compounds with Li-like therapeutic effects.