Understanding the mechanisms that regulate postnatal neurogenesis is becoming increasingly relevant since its modulation has been implicated in the pathogenesis of certain neuropsychiatric disorders. Lithium is a mood stabilizer known to increase hippocampal neurogenesis. Lithium also results in increased levels of the angiogenic factor vascular endothelial growth factor (VEGF). Since VEGF was recently shown to have neurogenic properties, we were interested to examine whether lithium administration might also be accompanied by alterations in VEGF expression in the hippocampus of normal and stressed rats; the latter treatment was introduced to reproduce some of the psychopathological signs for which lithium is used therapeutically. The expression of VEGF in the hippocampus in stressed animals was lower than that in controls, but the effect of stress was significantly attenuated in animals concomitantly receiving lithium. Double staining for VEGF and specific markers for immature neurons, mature neurons and astroglia revealed that immature neurons were most sensitive to the VEGF-inhibiting effects of stress. Confirming the involvement of a known regulatory pathway in these actions of lithium, we demonstrated that lithium co-administration prevented the stress-induced upregulation of glycogen synthase kinase-3beta (GSK-3beta) and down-regulation of beta-catenin expression; GSK-3beta is a known primary lithium target and its inhibition by this mood stabilizer leads to an upregulation of beta-catenin and subsequently, an increase of VEGF. Our results suggest that the actions of lithium, and possibly its therapeutic efficacy as a mood stabilizer also, are mediated by VEGF.