Thalidomide is a glutamic acid derivative initially introduced as a sedative hypnotic nearly forty years ago. It was withdrawn following numerous reports linking it to a characteristic pattern of congenital abnormalities in babies born to mothers who used the drug for morning sickness. It has gradually been re-introduced into clinical practice over the past two decades, albeit under strict regulation, since it was found to be useful in the management of erythema nodosum leprosum and HIV wasting syndrome. Recognition of its anti-angiogenic effect led to its evaluation in the treatment of various malignancies, where angiogenesis has been shown to play an important role. Numerous clinical trials done over the past four years have confirmed the significant anti-myeloma activity of this drug. It has also shown promise in preliminary trials in the treatment of a variety of different malignant diseases. The mechanisms of its antineoplastic effects continue to be the focus of ongoing research. It has become clear that even though its anti angiogenic effects play a significant role in the anti-tumor activity, there are other properties of this drug which are responsible as well. It also possesses anti-TNF alpha activity, which has led to its evaluation in several inflammatory states. In this concise review, we briefly describe the historical background and pharmacological aspects of this drug. We have concisely reviewed the current knowledge regarding mechanisms of its anti-neoplastic activity and the results of various clinical trials in oncology.