Lithium, a widely used substance for treatment of manic-depressive illness has been reported to alter the phase relationship of a variety of circadian rhythms which have been implicated in the aetiology of depression and manic-depressive disorder. Although its mechanism of action is not understood, the theraputic action of lithium has been related to its ability to alter circadian rhythms. Chronic lithium administration to rats resulted in lithium levels comparable to the human theraputic range. These lithium levels affected a broad range of biological variables by significantly modifying their circadian pattern of variation, notably during the dark period of an alternating 12h light/12h dark schedule. These included water intake, body weight, retina weight and pineal, serum, retina and hypothalamic melatonin measures. Retinal lithium levels were significantly higher than serum lithium levels and retinal melatonin levels were reduced by lithium. The data are interpreted as suggesting that lithium may exert its theraputic effects by influencing melatonin levels at several locations along the retinal-hypothalamic-pineal pathway, resulting in a modulation of the potential cue value of this physiological stimulus for synchronization of circadian rhythms. Such an effect of lithium could have important chronobiological implications for circadian rhythms which use light and dark as a phase cue.