Mood-stabilizing drugs are the most widely prescribed pharmacological treatments for bipolar disorder, a disease characterized by recurrent episodes of mania and depression. Despite extensive clinical utilization, significant questions concerning their mechanisms of action remain. In recent years, a diverse set of molecular and cellular targets of these drugs has been identified. Based on these findings, downstream effects on neural and synaptic plasticity within key circuits have been proposed. Here, we discuss recent data, identify current challenges impeding progress and define areas for future investigation. Further understanding of the primary targets and downstream levels of convergence of mood-stabilizing drugs will guide development of novel therapeutic strategies and help translate discoveries into more effective treatments with less burdensome adverse-effect profiles.