Thalidomide, a hypnosedative drug introduced in the 1950s, has been used in a variety of dermatologic conditions during the past few decades. Although originally withdrawn from the world market on discovery of its teratogenic effect, it has since been selectively reintroduced for use in various disorders thought to have an autoimmune or inflammatory basis. A review of the literature focused on clinical uses of thalidomide in the treatment of dermatologic diseases was performed. Diseases for which thalidomide has been found effective include erythema nodosum leprosum, prurigo nodularis, actinic prurigo, discoid lupus erythematosus, aphthous stomatitis, Behçet's syndrome, and graft-versus-host disease. Side effects such as teratogenicity and peripheral neuropathy remain its limiting factor. Thalidomide is a useful addition to the therapeutic armamentarium for treatment-resistant dermatoses as long as proper vigilance for adverse effects is maintained.