Chronic graft-versus-host disease (CGVHD) is a major cause of morbidity following allogeneic bone marrow transplantation. Thalidomide is active in salvage therapy for high-risk or resistant CGVHD. In a prospective randomized trial, we tested initial therapy with thalidomide. Patients with extensive CGVHD were randomized to receive either cyclosporine and alternate-day prednisone (n = 27, no-thalidomide [no-thal] group) or cyclosporine, prednisone, and thalidomide (200-800 mg/day; n = 27, thal group). Although most patients responded, initial therapy with thalidomide did not improve control of CGVHD. Response rates were 83% versus 89% at 2 months (P = .7), 88% versus 84% at 6 months (P > .8) and 85% versus 73% at 1 year (P = .5) in the thal and no-thal groups, respectively. Multivariate analysis revealed related donor transplant (odds ratio [OR] = 11.3; P =.03) and de novo or quiescent onset of CGVHD (OR = 7.7; P =.04) to be significant predictors of good early response, whereas a platelet count of > or =100,000/microL was a significant predictor of good response (OR = 10.4; P =.04) at 1 year. Survival for the thal and no-thal groups was similar at 1 year (66% versus 74%) and 2 years (66% versus 54%, P = .85). Multivariate analysis revealed progressive onset CGVHD (relative risk [RR] = 4.2; P =.01), unrelated donor (RR = 5.7; P < .01), sex mismatch (RR = 7.9; P < .01), and platelet counts of <100,000/microL (RR = 3.8; P = .01) as significant predictors of poorer survival. These data suggest that despite a high response rate (79% response and 53% complete response) and encouraging survival rates (70% at 1 year and 60% at 2 years), thalidomide offers no clinical benefit when incorporated into initial therapy for CGVHD. The value of thalidomide as salvage therapy requires further study.