The effects of lithium on vascular development were examined using the chick embryo area vasculosa in shell-less culture as an experimental model. Embryos were explanted after 48 h in ovo and LiCl (50, 100, 150 and 200 μg in 10 μl water) was applied to the centre of the blastodisc. Controls were untreated or given equimolar amounts of NaCl. At 24 h and 48 h after treatment, untreated and NaCl controls were identical, having well developed extraembryonic vessels. At doses of 100 μg and greater, LiCl significantly inhibited normal vascular development and expansion of the area vasculosa in the majority of explants. In many specimens blood islands continued to form but their assembly into primitive vessels was prevented, indicating that lithium affects the mechanism regulating the assembly of vascular endothelium. At the same time the embryos were alive but retarded in development compared with controls. When LiCl (150 μg) was applied to cultures explanted after 72 h in ovo (when the primary vascular network had already formed through vasculogenesis) no adverse effects were seen. This suggests that lithium affects vasculogenesis but not angiogenesis. Treatment with myo-inositol completely reversed the effects of lithium in a time dependent manner indicating that the phosphatidylinositol second messenger cycle may be involved in the cellular events of vasculogenesis. Finally the results of this study show that the yolk sac vasculature is particularly vulnerable to lithium and the consequent effects of this interference on embryonic development are discussed.