The literature concerning the use and possible mode of action of thalidomide in reactional lepromatous leprosy and in various other conditions is reviewed. Although it has no action against the leprosy bacillus, its value in the treatment of the adverse reactions in this type of leprosy is well established, many leprologists considering it to be superior to any other drug for this purpose. Its efficacy in actinic prurigo is also impressive, and there are reports suggesting benefit in discoid lupus erythematosus. By contrast, its reported action in a number of other conditions, including severe aphthous stomatitis, BehFet's syndrome, pyoderma gangrenosum, nodular prurigo, and postherpetic neuralgia, needs confirmation in a larger number of cases, backed in some instances by clinical trial. The mechanism of action of this drug may be related to (1) anti-inflammatory effects, particularly an inhibition of neutrophil chemotaxis, (2) immunosuppressive effects, or (3) effects on neural tissue. Furthermore, structure-activity studies may allow separation of these and other possible effects. This review is in no way intended to lend support to the indiscriminate use of a potentially hazardous drug in various diseases of unknown cause, but rather to draw attention to a number of conditions in which the drug has been found effective. The further judicious use of thalidomide or a nonteratogenic analogue, with careful observation of results, may contribute to knowledge of the underlying pathology in some of these conditions, and possibly also to the mechanism of action of the drug itself.