Multiple myeloma is an incurable bone marrow cancer, the treatment of which is notoriously difficult. Only modest advances have been achieved using complex polychemotherapeutic regimens, transplant strategies and supportive therapy. In 1999, when new drugs for myeloma were urgently needed, thalidomide was introduced and opened up a completely new line of therapy for the disease. Although the mechanism of action is not yet completely understood, thalidomide has demonstrated efficacy in patients with refractory, relapsed myeloma, even in late-stage cases. This article reviews the current knowledge of thalidomide in myeloma treatment, focusing especially on the possible mechanisms of action, clinical results and adverse events of this drug.