Inositol, a simple six-carbon sugar, forms the basis of a number of important intracellular signaling molecules. Over the last 35 years, a series of biochemical and cell biological experiments have shown that lithium (Li⁺) reduces the cellular concentration of myo-inositol and as a consequence attenuates signaling within the cell. Based on these observations, inositol-depletion was proposed as a therapeutic mechanism in the treatment of bipolar mood disorder. Recent results have added significant new dimensions to the original hypothesis. However, despite a number of clinical studies, this hypothesis still remains to be either proven or refuted. In this review of our current knowledge, I will consider where the inositol-depletion hypothesis stands today and how it may be further investigated in the future.