Lithium is used commonly to treat bipolar mood disorders. In addition to its primary therapeutic effects in the central nervous system lithium has a number of side effects in the kidney. The side effects include nephrogenic diabetes insipidus with polyuria, mild sodium wasting, and changes in acid/base balance. These functional changes are associated with marked structural changes in collecting duct cell composition and morphology, likely contributing to the functional changes. Over the past few years, investigations of lithium-induced renal changes have provided novel insight into the molecular mechanisms that are responsible for the disturbances in water, sodium, and acid/base metabolism. This includes dysregulation of renal aquaporins, epithelial sodium channel, and acid/base transporters. This review focuses on these issues with the aim to present this in context with clinically relevant features.