Thalidomide has several targets and mechanisms of action: a hypnosedative effect, several immunomodulatory properties with an effect on the production of TNF-alpha and the balance between the different lymphocyte subsets and an antiangiogenic action. Thalidomide has been used in several cutaneous inflammatory disorders (e.g., erythema nodosum leprosum in lepromatous leprosy, cutaneous lupus erythematosus and severe aphtosis), cancers (e.g., relapsed/refractory multiple myeloma, malignant melanoma and systemic signs in cancer) and inflammatory conditions (e.g., Crohn's disease and rheumatoid arthritis). Several side effects are associated with thalidomide. Some are major, such as teratogenicity, peripheral neuropathy and deep vein thrombosis. Somnolence and rash are frequently reported when thalidomide is used at higher doses as an anticarcinogenic agent and can lead to dose reduction or treatment discontinuation depending on severity. Minor side effects include abdominal pain and endocrine disturbances. To prevent the teratogenicity, use of thalidomide is strictly controlled in western countries with close adherence to a birth control programme. Close monitoring for early development of peripheral neuropathy is also recommended.