This study explored the use of lithium to prevent rat steroid-related osteonecrosis of the femoral head (ONFH) through the modulation of the β-catenin pathway. ONFH was induced by methylprednisolone combined with lipopolysaccharide, and serum lipids were analyzed. ONFH was detected by hematoxylin-eosin staining. Micro-CT-based angiography and bone scanning were performed to analyze vessels and bone structure, respectively. Immunohistochemical staining for peroxisome proliferator-activated receptor gamma (PPARγ), bone morphogenetic protein-2 (BMP-2), and vascular endothelial growth factor (VEGF) was analyzed. Protein levels of phospho-glycogen synthase kinase-3β at Tyr-216 (p-Tyr(216) GSK-3β), total glycogen synthase kinase-3β (GSK-3β) and β-catenin, as well as mRNA levels of GSK-3β and β-catenin in femoral heads, were assessed. The rate of empty bone lacunae in the femoral heads was lower in the lithium and control groups than in the model group. The lithium group showed preventive effects against steroid-related vessel loss by micro-CT-based angiography and VEGF staining. Lithium treatment improved hyperlipidemia and reduced PPARγ expression. Moreover, lithium improved steroid-related bone loss in micro-CT bone scans and BMP-2 staining analyses. Furthermore, local β-catenin was reduced in steroid-related ONFH, and lithium treatment increased β-catenin expression while reducing p-Tyr(216) GSK-3β levels. The local β-catenin pathway was inhibited during steroid-related ONFH. Lithium may enhance angiogenesis and stabilize osteogenic/adipogenic homeostasis during steroid-related ONFH in rats by activating the β-catenin pathway.