Lithium is reabsorbed by distal nephron segments in sodium depleted states. It was hypothesized that lithium causes permanent injury to the developing kidney particularly in the sodium-retaining phase around weaning through entry into epithelial cells of the distal nephron and inhibition of glycogen synthase kinase-3b (GSK-3b). GSK-3b and pGSK-3b was investigated in a developing series of rat kidney cortex and medulla. Li⁺ was given to female wistar rats with litters through food pellets at postnatal (P) days 7–28. In human fetal and adult kidney the expression of GSK-3b was examined and also a kidney from a lithium treated patient was investigated. GSK-3b was associated with connecting tubule and collecting ducts in developing and adult human and rat kidney. Renal abundance of inactive, serine9 phosphorylated GSK-3b protein decreased significantly with postnatal development. At P28, plasma Li⁺ in offspring was 1.0 mmol/L. Kidneys exhibited dilated distal nephron segments with occasional cysts. Quantitative stereological analysis showed reduced total kidney volume, cortex and outer medulla volumes while inner medulla volume was not affected. Li⁺ increased pGSK-3b protein abundance in kidney and pGSK-3b-immunopositive cells was associated with cortical collecting ducts. Li⁺ increased cell proliferation while E-cadherin abundance and localization was not changed. After 6 weeks of lithium discontinution, male rats exhibited attenuated urine concentration capacity (2747 vs. 2126 mOsm/kg H₂O), with no difference in AQP2 abundance. Human kidney from chronic lithium treated patient showed cortical cysts that were GSK-3b and pGSK-3b-immunopositive. In conclusion we find that postnatal kidney development is associated with increased abundance of active, dephosphorylated GSK-3b in distal nephron segments. Lithium causes proliferation, structural injury and increases inactive pGSK-3b abundance in these segments. The data are compatible with epithelial entry of lithium and a causal role for GSK-3b in postnatal developing cortical collecting duct epithelium.