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The pathogenesis of bipolar disorder (BPD) is unknown. Using human-induced pluripotent stem cells (hiPSCs) to unravel pathological mechanisms in polygenic diseases is challenging, with few successful studies to date. However, hiPSCs from BPD patients responsive to lithium have offered unique opportunities to discern lithium’s mechanism of action and hence gain insight into BPD pathology. By profiling the proteomics of BPD–hiPSC-derived neurons, we found that lithium alters the phosphorylation state of collapsin response mediator protein-2 (CRMP2). The “set point” for the ratio of pCRMP2:CRMP2 is elevated uniquely in hiPSC-derived neurons from lithium responsive (Li-R) BPD patients, but not other psychiatric and neurological disorders. Utilizing neurons differentiated from human patient stem cells as an in vitro platform, we were able to elucidate the mechanism driving the pathogenesis and pathophysiology of lithium-responsive BPD, heretofore unknown. Importantly, the findings in culture were validated in human postmortem material as well as in animal models of BPD behavior. These data suggest that the “lithium response pathway” in BPD governs CRMP2’s phosphorylation, which regulates cytoskeletal organization, particularly in dendritic spines, leading to modulated neural networks that may underlie Li-R BPD pathogenesis. This chapter reviews the methodology of leveraging a functional agent, lithium, to identify unknown pathophysiological pathways with hiPSCs and how to translate this disease modeling approach to other neurological disorders.