Thalidomide is used along with dexamethasone to treat multiple myeloma in people who have been recently found to have this disease. It is also used alone or with other medications to treat and prevent skin symptoms of erythema nodosum leprosum (ENL; episodes of skin sores, fever, and nerve damage that occur in people with Hansen's disease [leprosy]). Thalidomide is in a class of medications called immunomodulatory agents. It treats multiple myeloma by strengthening the immune system to fight cancer cells. It treats ENL by blocking the action of certain natural substances that cause swelling.