The observation that patients treated with Li for manic-depressive illnesses develop an associated leukocytosis has led to a series of experimental and clinical studies of the hematopoietic effects of this simple molecule. Increases in blood neutrophils, eosinophils and perhaps monocytes are observed routinely when persons with an apparently normal hematopoietic system are exposed to" therapeutic" doses of the drug. Blood platelets tend to be increased, but lymphocytes and erythrocytes are unaffected. Neutrophilia reflects a true increase in the total number of mature neutrophils in all body compartments and is due to increased production. Neutrophil function generally is unaffected by Li. In man or in other mammals, certain classes of hematopoietic stem cells are increased by Li administration. Extensive studies of the effect of Li have been carried out in cultures of cells producing colonies of neutrophils and macrophages (CFUNM) in semisolid media. The colony-forming cell itself is little affected by Li. Cells which produce the factor essential for production of normal CFUNM (CSF) are stimulated to produce more CSF by the presence of Li. Studies of changes in vivo in CSF levels yield somewhat conflicting results; serum CSF being increased in some but not in others. Thus, it is not clear if the effect of Li on cell production in vivo reflects a direct effect on granulocytic precursors, including stem cells, or is mediated by stimulation of a feed-back loop (or both). A number of trials of Li therapy designed to modify induced neutropenia or to correct existing neutropenia are reviewed. Although many of these are very difficult to interpret, there is some reason to be optimistic concerning an eventual role for Li therapy of certain diseases associated with hematologic abnormalities.