Lenalidomide is a novel anticancer agent that has made a major impact in the treatment of patients with B-cell malignancies. A more potent analog of thalidomide, lenalidomide was developed to enhance immunomodulatory properties with improved safety profile. Its antitumor activity seems mediated through modulation of both the cytokine and cellular tumor cell microenvironment. Preclinical as well as clinical observations demonstrate that lenalidomide downregulates production of various critical prosurvival cytokines in the tumor microenvironment while concurrently promoting activation of T- and natural killer (NK) cell-mediated antitumor response. Early clinical investigations noted its efficacy in relapsed and/or refractory multiple myeloma patients. Subsequently, larger randomized studies confirmed the clinical benefit of lenalidomide when added to dexamethasone compared with dexamethasone alone in previously treated myeloma patients resulting in its recent approval by the US Food and Drug Administration. Consequently, the role of lenalidomide in other B-cell malignancies has been investigated, with impressive results in chronic lymphocytic leukemia and non-Hodgkin's lymphoma. This review summarizes the data from various clinical investigations and highlights the impact of lenalidomide in the management of patients with B-cell malignancies.