The immunomodulatory drug thalidomide is the treatment of choice for erythema nodosum leprosum (ENL), an inflammatory cutaneous and systemic complication of multibacillary leprosy. To elucidate the mechanism of action of thalidomide in this syndrome, we prospectively investigated 20 patients with ENL who were treated with thalidomide for 21 days. All patients responded to treatment, with the majority of them having complete resolution of cutaneous lesions within 7 days. This response was associated with a marked but transient increase in ex vivo mitogen-induced expression of interleukin (IL)-2 and interferon- gamma by CD4(+) and CD8(+) T cells that was observed on treatment day 7, but these returned to pretreatment levels by day 21. Plasma tumor necrosis factor- alpha levels were not high at baseline, and they increased modestly during treatment. Plasma levels of IL-12 increased steadily during thalidomide treatment. Hence, the therapeutic effect of thalidomide in ENL appears to be associated with transient immune stimulation, which suggests that the drug may promote an active immunoregulatory response.