Lithium augmentation refers to the addition of lithium to an antidepressant in the acute treatment phase of patients with depressive episodes who have failed to respond satisfactorily to treatment with antidepressant monotherapy. This article reviews the clinical evidence and hypotheses on the mode of action of lithium augmentation. For this purpose, studies were identified by searching Medline and by scanning the references of published reviews and standard textbooks. With regard to efficacy, 28 prospective studies (with a total of 838 depressed patients) were identified. The majority of randomized controlled trials has demonstrated substantial efficacy of lithium augmentation. A recent meta-analysis including only double-blind, placebo-controlled trials (N = 9) provided firm evidence that lithium augmentation has a statistically significant effect on response rate compared to placebo, and showed that lithium augmentation should be administered for at least 2 weeks to allow assessment of the patient's response. A recent double-blind, placebo-controlled trial revealed that responders to lithium augmentation should be maintained on the lithium-antidepressant combination for a minimum of 12 months. From animal studies there is robust evidence that lithium augmentation increases serotonin (5-HT) neurotransmission, possibly through a synergistic action of lithium and the antidepressant on brain 5-HT pathways. Neuroendocrine studies in humans on the effects of lithium augmentation on the HPA system showed an unexpected and marked increase in the ACTH and cortisol response in the combined dexamethasone/CRH test. These results are in contrast to the established decline of HPA system activity during treatment with antidepressants. In conclusion, lithium is the foremost and most well-documented augmentation strategy in refractory depression. In international treatment guidelines and algorithms, lithium augmentation is considered a first-line treatment strategy for patients with a major depressive episode who do not adequately respond to standard antidepressant treatment.