In the past 50 years, thalidomide has undergone a remarkable metamorphosis from a notorious drug inducing birth defects into a highly effective therapy for treating leprosy and multiple myeloma. Today, most notably, thalidomide and its analogs have shown efficacy against a wide variety of diseases, including inflammation and cancer. The mechanism underlying its teratogenicity as well as its anticancer activities has been intensively studied. This review summarizes the biological effects and therapeutic uses of thalidomide and its analogs, and the underlying mechanisms of thalidomide's action with a focus on its suppression of tumor growth.