1. The effect of Li+ on the agonist-dependent metabolism of [3H]inositol has been studied in rat brain, rat parotid and the insect salivary gland. 2. When brain or parotid slices were incubated in the presence of [3H]inositol, Li+ was found to amplify the ability of agonists such as carbachol, phenylephrine, histamine, 5-hydroxytryptamine and Substance P to elevate the amount of label appearing in the inositol phosphates. 3. A different approach was used with the insect salivary gland, which was prelabelled with [3H]inositol. After washing out the label, the subsequent release of [3H]inositol induced by 5-hydroxytryptamine was greatly decreased by Li+. During Li+ treatment there was a large accumulation of [3H]inositol 1-phosphate. 4. This ability of Li+ to greatly amplify the agonist-dependent accumulation of myo-inositol 1-phosphate offers a novel technique for identifying those receptors that function by hydrolysing phosphatidylinositol. 5. The therapeutic action of Li+ may be explained by this inhibition of myo-inositol 1-phosphatase, which lowers the level of myo-inositol and could lead to a decrease in the concentration of phosphatidylinositol, especially in those neurons that are being stimulated excessively. This alteration in phosphatidylinositol metabolism may serve to reset the sensitivity of those multifunctional receptors that generate second messengers such as Ca2+, cyclic GMP and the prostaglandins.