Thalidomide has recently been shown to have significant activity in refractory multiple myeloma (MM). A follow-up of the original phase II trial, expanded to 169 patients, shows 2-year survival of 60%; patients receiving > or =42 g over 3 months had a higher response rate and superior survival than those receiving lower doses. The addition of thalidomide to dexamethasone and chemotherapy for the management of post-transplant relapses results in higher response rates. The early results of the Total Therapy II trial for newly diagnosed MM patients show an unprecedented complete remission (CR) and near-CR rate of 69% after two melphalan-based transplants (whether or not receiving thalidomide). In addition, available clinical trial information involving at least 20 patients confirms that thalidomide is active in one third of patients in single-agent trials for refractory disease, with response rates increasing to 50% to 60% in combination with dexamethasone and to as high as 80% in combination with dexamethasone and chemotherapy. When applied as primary therapy in smoldering myeloma, one third of patients experienced 50% paraprotein reduction (PPR); in combination with dexamethasone pulsing, 70% to 80% of symptomatic patients responded. Thus, thalidomide is a major new tool in the treatment armamentarium of MM. The virtual lack of myelosuppression makes it an ideal agent for combination with cytotoxic chemotherapy. Newer, more potent, and less toxic derivatives of thalidomide are being evaluated.