Immunomodulatory drug lenalidomide is a synthetic compound derived by modifying the chemical structure of thalidomide to improve its potency and reduce its side effects. Lenalidomide is a 4-amino-glutamyl analogue of thalidomide that has emerged as a drug with activity against various hematological and solid malignancies. It is approved by FDA in USA for clinical use in myelodysplastic syndromes with deletion of chromosome 5q and multiple myeloma. Studies have shown that lenalidomide exert anti-tumor activity probably by various mechanisms in hematologic malignancies, such as immunomodulation, anti-angiogenesis and effects on signal transduction. In this article, the progresses of study on these problems are reviewed.