Objective:To review the current status of the management of bipolar disorder (manic‐depressive illness).Data sources and study selection:Controlled clinical trials as well as some recent important open studies are examined.Data extraction and synthesis:Lithium carbonate remains the mainstay of both the acute and prophylactic treatment of this condition. We highlight specific contentious issues in prophylactic management with lithium, that is, indications for initiating long‐term treatment, preferred serum concentrations, timing of the dose, duration of treatment and frequency of laboratory monitoring. In recent years, several alternatives to lithium have been demonstrated as effective in both the acute and prophylactic treatment of patients either unable to tolerate or inadequately responsive to this agent. There is now considerable evidence that carbamazepine is of similar efficacy to lithium and more recent studies suggest that valproate may also be as therapeutic. We outline details of the clinical roles of each of these agents, with guidelines concerning monitoring and adverse effects.