Thalidomide has recently been shown to be useful in the treatment of multiple myeloma and may also be useful in the treatment of other hematological malignancies. We have identified a new derivative of thalidomide, S-3-[3-amino-phthalimido]-glutarimide (S-3APG) with dual activity against B-cell neoplasias. S-3APG was able to directly inhibit the proliferation of myeloma and Burkitt's lymphoma cell lines in vitro without showing toxicity to normal bone marrow stromal cells or hematopoietic progenitor cells. In vivo, S-3APG treatment of drug resistant myeloma cell tumors in mice was able to produce complete and sustained regressions without any observed toxicity. Additionally, S-3APG induced complete regressions of Burkitt's lymphoma cell tumors. Furthermore, S-3APG inhibited angiogenesis more potently than thalidomide in the murine corneal micropocket model. We conclude that S-3APG is a powerful anti-myeloma and anti-B-cell-lymphoma agent that has both antiproliferative and antiangiogenic effects.