Thalidomide and its one analogue, lenalidomide (CC5103 or revlimid) are recently approved for the treatment of multiple myeloma. Multiple myeloma is characterized by an overproduction of malignant plasma cells in the bone marrow. The journey of thalidomide was started in 1956 when it was marketed as a non-barbiturate sedative agent. It was considered as a "wonder drug" that provided safe and sound sleep and hence, used to cure morning sickness in pregnant women. Later, in 1961, it was withdrawn from the world market due to its serious side effects, i.e., teratogenic activity. However, the recent decade has witnessed a true renaissance in interest in its broad biological activity. In particular, thalidomide was reevaluated and attracted significant attention due to its selective inhibitory activity of tumor necrosis factor-α (TNF-α), which is a clinically important activity against serious diseases such as rheumatoid arthritis, Crohn's disease, leprosy, AIDS, and various cancers. The comeback of thalidomide to the legitimate status of a marketed drug came in 1998 when it received FDA approval for the treatment of erythema nodosum leprosum (ENL). Recently, the drug has got FDA approval for the treatment of multiple myeloma. In the last few years, number of thalidomide analogues have been synthesized and are in clinical development as a class of immunomodulatory drugs. Among these, lenalidomide is more potent than thalidomide, and is also non-neurotoxic. It was shown in vitro studies to induce apoptosis or arrest growth even in resistant multiple myeloma cell lines, decrease binding of the cells to bone marrow stromal cells, and stimulate host natural killer cell immunity. It also inhibits tumour growth and decreases angiogenesis. Earlier reviews have described the pharmacological aspects of thalidomide and a review has focused only on synthetic aspect of thalidomide. However, review focusing on chemistry and metabolism and mechanism of biological activity is still lacking. In this review, we will concisely describe the therapeutic aspects, metabolism and synthesis of thalidomide.