Clinical studies involving patients with myelodysplastic syndromes or multiple myeloma have shown the efficacy of lenalidomide by reducing and often eliminating malignant cells while restoring the bone marrow function. To better understand these clinical observations, we investigated and compared the effects of lenalidomide and a structurally related analogue, CC-4047, on the proliferation of two different human hematopoietic cell models: the Namalwa cancer cell line and normal CD34+ progenitor cells. Both compounds had antiproliferative effects on Namalwa cells and pro-proliferative effects on CD34+ cells, whereas p21WAF-1 expression was up-regulated in both cell types. In Namalwa cells, the up-regulation of p21WAF-1 correlated well with the inhibition of cyclin-dependent kinase (CDK) 2, CDK4, and CDK6 activity leading to pRb hypophosphorylation and cell cycle arrest, whereas in CD34+ progenitor cells the increase of p21WAF-1 did not inhibit proliferation. Similarly, antiproliferation results were observed in two B lymphoma cell lines (LP-1 and U266) but interestingly not in normal B cells where a protection of apoptosis was found. Finally, CC-4047 and lenalidomide had synergistic effects with valproic acid [a histone deacetylase (HDAC) inhibitor] by increasing the apoptosis of Namalwa cells and enhancing CD34+ cell expansion. Our results indicate that lenalidomide and CC-4047 have opposite effects in tumor cells versus normal cells and could explain, at least in part, the reduction of malignant cells and the restoration of bone marrow observed in patients undergoing lenalidomide treatment. Moreover, this study provides new insights on the cellular pathways affected by lenalidomide and CC-4047, proposes new potential clinical uses, such as bone marrow regeneration, and suggests that the combination of lenalidomide or CC-4047 with certain HDAC inhibitors may elevate the therapeutic index in the treatment of hematologic malignancies.