Multiple myeloma is a treatable but not necessarily a curable plasma-cell cancer. After decades of minimal progress, two new classes of drugs with novel mechanisms of action - immunomodulatory drugs (thalidomide and lenalidomide) and proteasome inhibitors (bortezomib) - have been introduced for the treatment of this disease. Thalidomide and lenalidomide have shown great activity as single agents and in combination with glucocorticoids for the treatment of chemotherapy-refractory myeloma. Thalidomide - and more recently lenalidomide - in combination with dexamethasone have shown promising results as induction therapy. These drugs can easily be combined with other chemotherapeutic agents to potentiate the anti-myeloma effect. The immunomodulatory function of these drugs can be successfully exploited to control residual disease during remission. Thus, both thalidomide and lenalidomide have ushered in a new era of optimism in the management of this incurable cancer.