There have been major advances in clinical understanding and treatment of bipolar disorder over the past decade. Randomised controlled trials of pharmacological treatments and psychological interventions have shown that there are effective short-term and long-term treatments for the disorder. Despite advances in treatment, diagnosis is often delayed or mistaken, and many people who could benefit are not using the treatments available. Functional and symptomatic recovery from episodes of bipolar disorder is frequently less complete than previously considered, and disability is often profound. Although manic episodes are the distinguishing feature of bipolar disorder, it appears that depression is the predominant mood disturbance and that much of the functional impairment associated with bipolar disorder results from this. Comorbidity with anxiety disorders or substance misuse is common. Advances in genetics, brain imaging and basic pharmacology are starting to provide understanding of the complex causative processes.