Despite its history as a human teratogen, thalidomide is emerging as a treatment for cancer and inflammatory diseases. Although the evolution of its clinical application could not have been predicted from the tragedy associated with its misuse in the past, its history serves as a lesson in drug development that underscores the need to understand the molecular pharmacology of a compound's activity, including associated toxicities. Here, we summarise the applications for thalidomide with an emphasis on clinical trials published over the past 10 years, and consider our knowledge of the molecular pharmacology of the drug in the context of clinical trial data, attempting to provide a mechanism-guided understanding of its activity.