Thalidomide, which was developed as a nonbarbiturate sedative agent, was taken off the market in 1961 after it was linked to a spate of major birth defects. Gradually, thalidomide was reintroduced for the treatment of a few skin diseases including leprous erythema nodosum, severe mucosal ulcers (e.g., associated with HIV infection or Behçet's disease), lymphocytic skin infiltrations, cutaneous lupus erythematosus, and chronic graft-versus-host disease. Recent reports of original pharmacological properties including modulation of cytokine production (mainly reduced TNF-α production) and inhibition of angiogenesis have led to the suggestion that thalidomide may be useful in some inflammatory and neoplastic conditions. Several open-label studies and case reports have described the effects of thalidomide in Crohn's disease, rheumatoid arthritis, ankylosing spondylarthritis, systemic sclerosis, and a few other systemic disorders. In these indications, minor but dose-limiting side effects were apparently common. Thalidomide analogs with better acceptability profiles are under evaluation. The anti-angiogenic effects of thalidomide may make this compound valuable as single-drug therapy or as an adjunct to chemotherapy in patients with cancer, particularly those with metastases or multiple myeloma. This possibility requires further evaluation.