Despite its virtually universal acceptance as the gold standard in treating bipolar disorder, prescription rates for lithium have been decreasing recently. Although this observation is multifactorial, one obvious potential contributor is the side effect and toxicity burden associated with lithium. Additionally, side effect concerns assuredly play some role in lithium nonadherence. This paper summarizes the knowledge base on side effects and toxicity and suggests optimal management of these problems. Thirst and excessive urination, nausea and diarrhea and tremor are rather common side effects that are typically no more than annoying even though they are rather prevalent. A simple set of management strategies that involve the timing of the lithium dose, minimizing lithium levels within the therapeutic range and, in some situations, the prescription of side effect antidotes will minimize the side effect burden for patients. In contrast, weight gain and cognitive impairment from lithium tend to be more distressing to patients, more difficult to manage and more likely to be associated with lithium nonadherence. Lithium has adverse effects on the kidneys, thyroid gland and parathyroid glands, necessitating monitoring of these organ functions through periodic blood tests. In most cases, lithium-associated renal effects are relatively mild. A small but measurable percentage of lithium-treated patients will show progressive renal impairment. Infrequently, lithium will need to be discontinued because of the progressive renal insufficiency. Lithium-induced hypothyroidism is relatively common but easily diagnosed and treated. Hyperparathyroidism from lithium is a relatively more recently recognized phenomenon.