The efficacy of lithium prophylaxis for recurrent mood disorders is well established. Despite concern that the later efficacy studies have shown poorer results, these studies (after 1980) are equally confirmatory of lithium's efficacy. However, questions have been raised with regards to the effectiveness of lithium prophylaxis under 'ordinary' clinical conditions. Part of the confusion stems from the failure to distinguish clearly efficacy (the potential of a treatment) from effectiveness (the results obtained under clinical conditions). Studies of effectiveness or naturalistic studies show poorer results than efficacy studies in all areas of medicine. The major reason for this discrepancy with lithium prophylaxis is poor compliance. Estimations of the efficiency (cost benefits) of lithium prophylaxis are flawed by the failure to consider such issues. It is proposed that specialised lithium or mood disorders clinics have the potential to narrow the gap between efficacy and effectiveness--efficiency.