The demonstration of increased angiogenesis in cancer pathogenesis prompted the use of thalidomide in both solid tumors and hematologic malignancies. Its broad spectrum of actions besides its antiangiogenic potential, specifically, its immunomodulatory properties, antiinflammatory actions, and direct effect on tumor cells and their microenvironment, provides an alternative strategy in the armamentarium against cancer. Thalidomide is being evaluated for treatment of hematologic cancers like multiple myeloma and myelodysplasia, and solid tumors like lung, breast, renal, and colon cancer. Thalidomide analogues, the immunomodulatory drugs have increased potency and have demonstrated efficacy and reduced toxicity in phase I and II clinical studies. This article reviews both laboratory-based and clinical studies with thalidomide and the immunomodulatory drugs and their application in different cancers.