Smoldering multiple myeloma (SMM) is usually followed expectantly without therapy. We conducted a phase 2 trial in 76 eligible patients with SMM, combining thalidomide (THAL, 200 mg/d) with monthly pamidronate. In the first 2 years, THAL dose reduction was required in 86% and drug was discontinued in 50%. Within 4 years, 63% improved, including 25% qualifying for partial response (PR); by then, 34 patients had progressed and 17 required salvage therapy. Unexpectedly, attaining PR status was associated with a shorter time to salvage therapy for disease progression (P < .001), perhaps reflecting greater drug sensitivity of more aggressive disease. Low beta-2-microglobulin levels less than 2 mg/L were independently associated with superior overall and event-free survival. Four-year survival and event-free survival estimates of 91% and 60%, respectively, together with a median postsalvage therapy survival of more than 5 years justify the conduct of a prospective randomized clinical trial to determine the clinical value of preemptive therapy in SMM. Trial registered at http://www.clinicaltrials.gov under identifier NCT00083382.