Thalidomide is used as an experimental drug for the treatment of chronic inflammatory diseases with an autoimmune or infectious background. The pharmacologic action involves the downregulation of the pro-inflammatory cytokine tumor necrosis factor-alpha (TNF-alpha) and inhibition of basic fibroblast growth factor (bFGF)-induced angiogenesis; however, not much is known about thalidomide's effect on immunologic parameters in lupus erythematosus (LE). Method This is an open study of a group of five consecutive systemic lupus erythematosus (SLE) patients treated with thalidomide (100 mg/day) and five consecutive cutaneous LE patients not responsive to conventional therapy. The clinical and immunologic parameters (C-reactive protein, immunoglobulin, and complement serum levels, lymphocyte counts) were investigated during thalidomide treatment for up to 2 years in both patient groups. An increase in the absolute peripheral lymphocyte count was observed beginning after 2 weeks of systemic thalidomide treatment in nine out of 10 LE patients, and remained stable throughout thalidomide treatment. Elevated serum levels of C-reactive protein and titers of autoantibodies to double-stranded (ds) DNA decreased in SLE patients. No significant changes were detected in the serum levels of the complement components C3 and C4 and immunoglobulins in all LE patients. Regression of inflammatory skin lesions and regrowth of hair were recorded. As a side-effect, polyneuropathy was observed in four out of 10 patients, with the earliest onset at 3 weeks of thalidomide treatment. Thalidomide is a potent anti-inflammatory drug in patients with SLE and cutaneous LE, possibly interacting with the recruitment of lymphocytes. It leads to the regrowth of hair in LE-related alopecia and effluvium. Early symptoms of polyneuropathy should be registered and the drug should be withdrawn. Thalidomide should be restricted to patients who show no response to standard therapeutic regimens and should only be used under strict precautions with regard to its known teratogenic risk.