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Neuropsychiatric disorders involve various pathological mechanisms, resulting in neurodegeneration and brain atrophy. Neurodevelopmental processes have shown to be critical for the progression of those disorders, which are based on genetic and epigenetic mechanisms as well as on extrinsic factors. We review here common mechanisms underlying the comorbidity of Bipolar Disorders and Alzheimer's Disease, such as aberrant neurogenesis and neurotoxicity, reporting current therapeutic approaches. The understanding of these mechanisms precedes stem cell-based strategies as a new therapeutic possibility for treatment and prevention of Bipolar and Alzheimer's Disease progression. Taking into account the difficulty of studying the molecular basis of disease progression directly in patients, we also discuss the importance of stem cells for effective drug screening, modeling and treating psychiatric diseases, once in vitro differentiation of patient-induced pluripotent stem cells provides relevant information about embryonic origins, intracellular pathways and molecular mechanisms.BD and AD share common clinical, epigenetics and molecular pathological mechanisms.Neurotoxic environment in BD and AD leads to impaired neurogenesis and neurodegeneration.Lithium and memantine act in similar pathways in BD and AD.Stem cell therapies are powerful approaches for treating and understanding BD and AD.iPSC cells provide tools for in vitro modeling of BD and AD and drug screening for therapy.