A series of new water-soluble thalidomide prodrugs was prepared. All compounds were derivatized on the nitrogen of the glutarimide ring. Esters of natural amino acids and succinic acid derivatives have been introduced by reaction with the hydroxymethyl thalidomide 2. Nicotinic acid derivatives were prepared from halomethyl derivatives. Additionally, a methoxymethyl derivative and a carboxymethyl derivative were prepared directly from thalidomide. Most compounds showed a very large increase in water solubility compared to thalidomide itself (0.012mg/mL). The amorphous hydrochlorides of the N-methylalanine ester 8, valine ester 9, and glycylglycine ester 10, respectively, were the most soluble compounds showing solubility greater than 300mg/mL, which equals an increase greater than 15,000-fold. The lipophilicity of the prodrugs has been determined by their HPLC capacity factors k'. The stability of selected compounds was determined. The hydrolysis rates follow pseudo-first order kinetics. In order to assess the immunological activity, the prodrugs were tested using tumor necrosis factor-alpha and interleukin-2 inhibition assays. Selected compounds were additionally investigated on their abililty to inhibit the local Shwartzman reaction, an assay to determine the vascular permeability. The prodrugs retained high effectiveness in the inhibition of TNF-alpha release. Our results indicated that the more stable prodrugs exhibited higher activity in the immunological assays. Some compounds showed higher activity than thalidomide itself, suggesting a high affine binding to the pharmacophore. In conclusion, the prodrugs exhibited high water solubility and high activity and might therefore be used in therapeutic applications.