The resurgence of interest in thalidomide in the last decade has been remarkable. Thalidomide has established its own niche market particularly for the dermatological manifestations associated with HIV, Behçet's disease, graft-versus-host disease and systemic lupus erythematosus. To a large extent this has resulted from initial empirical uncontrolled studies in conditions resistant to other drug therapies. Appropriate trials are now being published for most of the prevalent indications. Thalidomide produces partial inhibition of tumour necrosis factor-α productionin vivobut recent data reveals that it can also act as a co-stimulatory molecule for T cell activationin vitro, resulting in increased production of interleukin-2 and interferon-γ. Hence in addition to monocyte inhibitory activity, thalidomide can exert a co-stimulatory or adjuvant-like effect on T cell responses. The unraveling of the molecular basis of thalidomide's therapeutic effects would suggest that an expansion of the use of thalidomide and its analogues in other conditions is highly likely. It remains imperative, however, that physicians using this fascinating drug are familiar with its risks and adverse effects.