The therapeutic properties of lithium ions (Li+) are well known; however, the mechanism of their action remains unclear. To investigate this problem, we have isolated Li+-resistant mutants from Dictyostelium. Here, we describe the analysis of one of these mutants. This mutant lacks the Dictyostelium prolyl oligopeptidase gene (dpoA). We have examined the relationship between dpoA and the two major biological targets of lithium: glycogen synthase kinase 3 (GSK-3) and signal transduction via inositol (1,4,5) trisphosphate (IP3). We find no evidence for an interaction with GSK-3, but instead find that loss of dpoA causes an increased concentration of IP3. The same increase in IP3 is induced in wild-type cells by a prolyl oligopeptidase (POase) inhibitor. IP3 concentrations increase via an unconventional mechanism that involves enhanced dephosphorylation of inositol (1,3,4,5,6) pentakisphosphate. Loss of DpoA activity therefore counteracts the reduction in IP3 concentration caused by Li+ treatment. Abnormal POase activity is associated with both unipolar and bipolar depression; however, the function of POase in these conditions is unclear. Our results offer a novel mechanism that links POase activity to IP3 signalling and provides further clues for the action of Li+ in the treatment of depression.