Bipolar disorder (BD) is a debilitating psychiatric illness that is uniquely characterized by switching between psychopathologically contrasting phases of mania and depression, often with intervening periods of euthymia. However, these periods of apparent clinical recovery (euthymia) are marked by subtle social, occupational, and cognitive impairments, profiled by recent neuropsychological investigations. Determining the cognitive changes across these three phases may help differentiate the disruptions that are mood state-dependent from those associated with underlying pathology. This article therefore critically reviews the reported neuropsychological impairments in BD and the methodological limitations facing such research. Integration of the available evidence, principally from the field of neuropsychology, when synthesized, implicates the prefrontal cortex in the etiopathogenesis of BD and posits cortical-subcortical-limbic disruption in recovered euthymic patients that manifests as cognitive dysfunction.