Bipolar disorder (BD) is a chronic illness with high morbidity and mortality. Pediatric onset BD has a more severe course of illness with higher rates of relapse and psychosocial impairment. Discovering interventions early in the course of BD in youth is paramount to preventing full illness expression and improve functioning in these individuals throughout the lifespan. It is therefore important to understand the mechanisms involved in the development of BD in order to determine which youth are at most risk and provide biological targets for early intervention. To serve this cause, we propose a neurodevelopmental model of BD, based on the existing data that implicate prefrontal-subcortical network dysfunction, caused by pre-existing genetic susceptibility and triggered by pathological reactions to stress and chronic inflammatory processes.