We conducted a clinical trial of thalidomide as initial therapy for asymptomatic smoldering (SMM) or indolent multiple myeloma (IMM). Sixteen patients were studied. Thalidomide was given orally at a dose of 200 mg/day for 2 weeks, and then increased as tolerated by 200 mg/day every 2 weeks to a maximum dose of 800 mg/day. Bone marrow microvessel density (MVD) and angiogenesis grading were estimated using CD34 immunostaining. Six patients had a confirmed response to therapy with at least 50% or greater reduction in serum and urine monoclonal (M) protein. When minor responses (25-49%) decrease in M protein concentration) were included, 11 of 16 patients (69%) responded to therapy. Major grade 3-4 toxicities included two patients with somnolence, and one patient each with syncope and neutropenia. Pre-treatment MVD was not a significant predictor of response to therapy, median MVD 4 and 12 in responders and non-responders respectively, P = 0.09. We conclude that thalidomide has significant activity in the treatment of newly diagnosed SMM/IMM. However, we do not recommend treatment with thalidomide at this stage since some patients with SMM/IMM can be stable for several months or years without any therapy. Additional randomized trials are needed to determine if thalidomide will delay progression to active multiple myeloma.