Lithium is first-line therapy for bipolar affective disorder and has recently been shown to have protective effects in populations at risk for Alzheimer’s disease (AD). However, the mechanism underlying this protection is poorly understood and consequently limits its possible therapeutic application in AD. Moreover, conventional lithium formulations have a narrow therapeutic window and are associated with a severe side effect profile. Here we evaluated a novel microdose formulation of lithium, coded NP03, in a well-characterized rat model of progressive AD-like amyloid pathology. This formulation allows microdose lithium delivery to the brain in the absence of negative side effects. We found that NP03 rescued key initiating components of AD pathology, including inactivating GSK-3β, reducing BACE1 expression and activity, and reducing amyloid levels. Notably, NP03 rescued memory loss, impaired CRTC1 promoter binding of synaptic plasticity genes and hippocampal neurogenesis. These results raise the possibility that NP03 be of therapeutic value in the early or preclinical stages of AD.