Lithium is a well-established therapeutic option for the acute and long-term management of bipolar disorder and major depression. More recently, based on findings from translational research, lithium has also been regarded as a neuroprotective agent and a candidate drug for disease-modification in certain neurodegenerative disorders, namely, Alzheimer’s disease (AD), amyotrophic lateral sclerosis (ALS), and, more recently, Parkinson’s disease (PD). The putative neuroprotective effects of lithium rely on the fact that it modulates several homeostatic mechanisms involved in neurotrophic response, autophagy, oxidative stress, inflammation, and mitochondrial function. Such a wide range of intracellular responses may be secondary to two key effects, that is, the inhibition of glycogen synthase kinase-3 beta (GSK-3β) and inositol monophosphatase (IMP) by lithium. In the present review, we revisit the neurobiological properties of lithium in light of the available evidence of its neurotrophic and neuroprotective properties, and discuss the rationale for its use in the treatment and prevention of neurodegenerative diseases.