Bipolar disorder is a chronic, frequently relapsing illness with a prevalence of 1.2% to 3.4% in the general population. It is associated with high disability, higher comorbidity due to medical illnesses, and significant social and economical consequences for patients, their families, and society. The episodic nature of this disease warrants rational use of medications and proper monitoring for adverse events. Various drug classes, such as mood stabilizers, antipsychotics, benzodiazepines, and antidepressants, are used for the acute and maintenance treatment of bipolar disorder. Each group of drugs is associated with wide array of adverse events and drug interactions, which are the main hurdles in treatment outcome and compliance. Common side effects seen with several agents, particularly antipsychotics, are somnolence, weight gain, extrapyramidal symptoms, dyslipidemia, type-2 diabetes, and hyperprolactinemia. Major drug interactions are seen with drugs such as carbamazepine, due to hepatic enzyme induction. Adverse effects such as somnolence are tolerability concerns and can be managed easily; others, such as diabetes mellitus, are safety concerns. It is prudent to have precise knowledge of the individual drug's side-effect profile, pharmacokinetics, and pharmacodynamics, to plan a treatment regimen. More research is needed to understand potential risks of various drugs and to devise and incorporate monitoring protocols in the treatment regimen.