Can you please post the URL to a sample page? We can't say what's wrong from a screen cap.
Generally text wraps if you don't stop it from doing so, lists are no exception. One way to stop it from wrapping is using white-space:nowrap, so that's not a good idea. Something, probably in your CSS, stops the text from wrapping.
Look at this. As long as the words aren't too long the text wraps.
Code:
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01//EN"
"http://www.w3.org/TR/html4/strict.dtd">
<html>
<head>
<title>List lines wrap too</title>
<style type="text/css">
ul { width: 3.5em; border: dashed }
</style>
</head>
<body>
<ul>
<li>Good morning</li>
<li>Rumpelstiltskin</li>
<li>'Twas brillig and the slithy toves</li>
</ul>
</body>
</html>