Neurodegeneration is a pathological process characterized by progressive neuronal impairment, dysfunction, and loss due to mitochondrial dysfunction, oxidative stress, inflammation, and apoptosis. Many studies have shown that lithium protects against neurodegeneration. Herein, we summarize recent clinical and laboratory studies on the neuroprotective effects of lithium against neurodegeneration and its potential to modulate mitochondrial dysfunction, oxidative stress, inflammation, and apoptosis. Recent findings indicate that lithium regulates critical intracellular pathways such as phosphatidylinositol‐3 (PI3)/protein kinase B (Akt)/glycogen synthase kinase‐3 (GSK3β) and PI3/Akt/response element‐binding protein (CREB)/brain‐derived neurotrophic factor (BDNF). We queried PubMed, Web of Science, Scopus, Elsevier, and other related databases using search terms related to lithium and its neuroprotective effect in various neurodegenerative diseases and events from January 2000 to May 2022. We reviewed the major findings and mechanisms proposed for the effects of lithium. Lithium's neuroprotective potential against neural cell degeneration is mediated by inducing anti‐inflammatory factors, antioxidant enzymes, and free radical scavengers to prevent mitochondrial dysfunction. Lithium effects are regulated by two essential pathways: PI3/Akt/GSK3β and PI3/Akt/CREB/BDNF. Lithium acts as a neuroprotective agent against neurodegeneration by preventing inflammation, oxidative stress, apoptosis, and mitochondrial dysfunction using PI3/Akt/GSK3β and PI3/Akt/CREB/BDNF signaling pathways.