Thalidomide--removed from widespread clinical use by 1962 because of severe teratogenicity--has anti-angiogenic and immunomodulatory effects, including the inhibition of TNF alpha. It has returned to practice as an effective oral agent in the management of various disease states including erythema nodosum leprosum, for which it was FDA-approved in 1998, and more recently certain malignancies, including multiple myeloma. Whilst the mechanism of action of thalidomide remains incompletely understood, considerable insight has been generated by extensive preclinical studies in multiple myeloma. Moreover, clinical trials both as a single agent and in combination have confirmed benefit in relapsed and refractory disease. Thalidomide's role in treating newly diagnosed patients is currently under study and it is now established as an important therapeutic option in the treatment of multiple myeloma.