Thirty patients with myelodysplastic syndromes (MDS) were treated with thalidomide at 100 mg/d p.o., increased as tolerated to 400 mg/d for 12 weeks. Levels of apoptosis, macrophage number, microvessel density (MVD), tumour necrosis factor alpha (TNF-alpha), transforming growth factor beta (TGF-beta), interleukin 6 (IL-6), vascular endothelial growth factor (VEGF) and basic fibroblast growth factor (bFGF) were determined in the serum, bone marrow (BM) plasma and BM biopsies before and after therapy. Pretherapy biological characteristics of MDS patients were compared with similar studies performed in 11 normal volunteers. Ten patients demonstrated haematological improvement in the erythroid series, six becoming transfusion independent. Responders had a higher pretherapy platelet count (P < 0.048) and lower BM blasts (P < 0.013). Median time to response was 10 weeks, and four remain in remission beyond a year. Pretherapy MDS BMs showed higher MVD (P < 0.001) and TGF-beta (P < 0.03) and higher serum TNF-alpha (P < 0.008) compared with normal control subjects. After therapy, only BM TGF-beta decreased significantly (P < 0.002). Pretherapy haemoglobin was directly related to serum VEGF (P < 0.001) in responders and inversely related in non-responders (P < 0.05), suggesting the possibility that angiogenesis may be a primary pathology in the former and a consequence of anaemia-induced hypoxia in the latter. We conclude that thalidomide has important clinical and biological effects in at least a subset of MDS patients, but the precise mechanism of its action remains unknown and requires further study including a larger number of patients.