Immunomodulatory drugs (IMiDs) are orally available small molecules that potently inhibit tumor necrosis factor-alpha (TNF-alpha) production by lipopolysaccharide (LPS)-stimulated human peripheral blood mononuclear cells (HuPBMCs) but enhance secretion of such cytokines as interleukin-2 (IL-2) and interferon-gamma (IFN-gamma) by stimulated T cells. The mechanism of cytokine regulation by IMiDs has not yet been determined. In the present study, we investigated the effects of one of the IMiDs, CC-4047 (Actimid, Celgene, Warren, NJ), on synthesis of IL-2 protein and mRNA and on the activity and expression of transcription factors. Treatment with CC-4047 enhances the secretion of IL-2 protein and the expression of IL-2 mRNA in a dose-dependent and time-dependent manner. In T cells stimulated with phorbol myristate acetate (PMA)/ionomycin, CC-4047 enhanced the DNA-binding activity of activated protein-1 (AP-1) but not NF-kappaB, Octomer-1 (OCT-1), or NFAT by 2-fold and 4-fold after an incubation time of 1 and 3 h, respectively. Luciferase reporter assays in Jurkat cells showed similar effects on transcription factor activity. Using in vitro kinase activity assays, we also showed that CC-4047 enhances the activity of protein kinase C-theta (PKC-theta) in stimulated T cells. The secreted IL-2 from HuPBMCs was shown to activate natural killer (NK) cells to lyse their target cell line K562. Taken together, our results demonstrate that the IMiDs exert their effects at least in part by activating PKC-theta and acting on AP-1 DNA-binding activity in T cells, resulting in augmented IL-2 synthesis and activation of IL- 2-dependent downstream effectors, such as NK cells.