The inelastic scattering of positrons by excited lithium alkali atoms Li^*(2p) have been investigated within the frame work of the coupled-static and frozen-core approximations with the assumption that the elastic and rearrangement channels are open. In the present work, a rather complicated computer code is developed based on the coupled-static, frozen-core and Green’s function partial wave expansion technique. The partial and total elastic and positronium (Ps) formation cross sections of e⁺-Li^*(2p) are calculated through a wide range of incident energy of positrons ranging from 0.3 eV to 1000 eV. Also, we have calculated the partial and total elastic and rearrangement (reversal of the Ps formation) cross sections of Ps-Li⁺ collisions through the low, intermediate and high energy regions. The effect of polarization potential of the Ps atom is taken into our consideration. The total cross sections which corresponding to twelve partial cross sections (calculated at twelve values of the total angular momentum l = 0 to l = 11) are calculated for each channel. Our calculated total positronium formation cross sections are compared with experimental results and those calculated by other authors. The present calculations encourage the experimental physicists to carry out positron-lithium experiments by taking the excited lithium target into accounts in order to obtain more positronium especially in the low and intermediate energy regions.