Thalidomide was introduced in the treatment of multiple myeloma in the late 1990s. Following the initial results, which demonstrated dramatic response rates in heavily pretreated patients, a number of Phase II studies have confirmed the efficacy of this agent in relapsed patients. However, a high incidence of side effects at the dosage initially recommended (400 mg/day) justified further studies with lower doses of thalidomide given alone or in combination with dexamethasone or chemotherapy. Thalidomide is currently considered as one of the most active agents in relapsed myeloma. Recent studies have demonstrated that thalidomide could also be used as part of frontline therapy. The combination of thalidomide plus dexamethasone as initial therapy appears to be slightly superior to dexamethasone alone or to vincristine-doxorubicine-dexamethasone, but with an increased risk of deep vein thrombosis. Maintenance with thalidomide after autologous transplantation appears to increase the complete remission rate and to prolong progression-free survival. The combination of thalidomide plus melphalan and prednisone is superior to the classical melphalan-prednisone regimen in elderly patients, and will become the standard of care. Thalidomide has been registered in the USA in combination with dexamethasone in newly diagnosed patients, but is not yet registered in the European Union. Its use is currently challenged by bortezomib and by thalidomide's analog lenalidomide.