Lithium is highly effective in the treatment of bipolar disorder and also has multiple effects on embryonic development, glycogen synthesis, hematopoiesis, and other processes. However, the mechanism of lithium action is still unclear. A number of enzymes have been proposed as potential targets of lithium action, including inositol monophosphatase, a family of structurally related phosphomonoesterases, and the protein kinase glycogen synthase kinase-3. These potential targets are widely expressed, require metal ions for catalysis, and are generally inhibited by lithium in an uncompetitive manner, most likely by displacing a divalent cation. Thus, the challenge is to determine which target, if any, is responsible for a given response to lithium in cells. Comparison of lithium effects with genetic disruption of putative target molecules has helped to validate these targets, and the use of alternative inhibitors of a given target can also lend strong support for or against a proposed mechanism of lithium action. In this review, lithium sensitive enzymes are discussed, and a number of criteria are proposed to evaluate which of these enzymes are involved in the response to lithium in a given setting.