The chiral inversion and hydrolysis of thalidomide and the catalysis by bases and human serum albumin were investigated by using a stereoselective HPLC assay. Chiral inversion was catalyzed by albumin, hydroxyl ions, phosphate, and amino acids. Basic amino acids (Arg and Lys) had a superior potency in catalyzing chiral inversion compared to acid and neutral ones. The chiral inversion of thalidomide is thus subject to specific and general base catalysis, and it is suggested that the ability of HSA to catalyze the reaction is due to the basic groups of the amino acids Arg and Lys and not to a single catalytic site on the macromolecule. The hydrolysis of thalidomide was also base-catalyzed. However, albumin had no effect on hydrolysis, and there was no difference between the catalytic potencies of acidic, neutral, and basic amino acids. This may be explained by different reaction mechanisms of the chiral inversion and hydrolysis of thalidomide. Chiral inversion is deduced to occur by electrophilic substitution involving specific and general base catalysis, whereas hydrolysis is thought to occur by nucleophilic substitution involving specific and general base as well as nucleophilic catalysis. As nucleophilic attack is sensitive to steric properties of the catalyst, steric hindrance might be the reason albumin is not able to catalyze hydrolysis. 1H NMR experiments revealed that the three teratogenic metabolites of thalidomide, in sharp contrast to the drug itself, had complete chiral stability. This leads to the speculation that, were some enantioselectivity to exist in the teratogenicity of thalidomide, it could result from fast hydrolysis to chirally stable teratogenic metabolites.