Thalidomide and its immunomodulatory (IMiDs) analogs (lenalidomide, Revlimid, CC-5013; CC-4047, ACTIMID) are a novel class of compounds with numerous effects on the body's immune system, some of which are thought to mediate the anticancer and anti-inflammatory results observed in humans. Thalidomide is currently being used experimentally to treat various cancers and inflammatory diseases. It is approved for the treatment of dermal reaction from leprosy and is currently in phase III trials for multiple myeloma. Thalidomide and IMiDs inhibit the cytokines tumor necrosis factor-alpha (TNF-alpha), interleukins (IL) 1beta, 6, 12, and granulocyte macrophage-colony stimulating factor (GM-CSF). They also costimulate primary human T lymphocytes inducing their proliferation, cytokine production, and cytotoxic activity thereby increasing the T cells' anticancer activity. They induce an IL-2-mediated primary T cell proliferation with a concomitant increase in IFN-gamma production and decrease the density of TNF-alpha-induced cell surface adhesion molecules ICAM-1, VCAM-1, and E-selectin on human umbilical vein endothelial cells. Thalidomide stimulates the Th-1 response increasing IFN-gamma levels while CC-4047 increased IL-2 as well. Some of the above immunomodulatory activities along with anti-angiogenic, anti-proliferative, and pro-apoptotic properties are thought to mediate the IMiDs' antitumor responses observed in relapsed and refractory multiple myeloma and some solid tumor cancers. This has led to their use in various oncology clinical trials. The second generation IMiD, lenalidomide, has shown potential in treating the bone marrow disorders myelodysplastic syndrome and multiple myeloma. It is currently in phase II and III trials for these diseases respectively with numerous phase II trials in other hematologic and solid tumors.