Thalidomide is a sedative hypnotic that was widely used in the 1950s but was withdrawn due to its teratogenic properties. The compound has recently been reintroduced as an immune modulating agent. Thalidomide significantly aggravates canine cataplexy, a pathological manifestation of rapid eye movement (RFM) sleep atonia seen in narcolepsy. This compound also increases REM sleep and slow wave sleep in these animals. In vitro receptor binding and enzyme assays demonstrate that thalidomide does not bind to or enzymatically modulate the neurotransmitter systems reported to be involved in the regulation of cataplexy. Thalidomide may therefore affect cataplexy through its immune modulation properties. Further studies on the mechanisms of action of thalidomide should increase our understanding of the pathophysiology of this disabling disorder.