Multiple myeloma is a relatively common hematologic malignancy with no definitive treatment available. Although, therapy may include allogenic bone marrow transplantation, high-dose ablative chemotherapy followed by bone marrow or peripheral stem cell transplantation, melphalan/corticosteroid therapy, alpha-interferon treatment, and combined cytostatic chemotherapy, currently none of these alternatives offers cure for the disease. Thalidomide is an infamous molecule for its teratogenicity, yet it possesses potent immunomodulatory, anti-angiogeneic and, in higher concentrations, direct anti-myeloma-cell properties. At present, the drug is only approved for the treatment of erythema nodosum of leprosy, however, there are several preliminary results that show clinical efficacy in multiple myeloma. This drug has especially potent anti-myeloma effects in combinations with dexamethasone and certain cytostatic chemotherapeutic agents. The effects are evident both in polyresistant, and relapsing myeloma, a form with no accepted effective treatment options. In this paper, the fundamental molecular and cellular effects of thalidomide are summarized then the most important clinical studies with thalidomide are reviewed. It is the authors' hope that thalidomide will soon be a full member of the medical arsenal in the fight against multiple myeloma.