Thalidomide represents a promising immunomodulatory drug that targets both leukemia cells and the tumor microenvironment. We treated patients with chronic lymphocytic leukemia (CLL) with a combined thalidomide/fludarabine regimen and monitored cellular and molecular changes induced by thalidomide in vivo before fludarabine treatment. Thalidomide was given daily (100 mg p.o. per day) and fludarabine was administered on days 7-11 (25 mg/m(2) i.v. per day) within each 4-week cycle (maximum of 6 cycles). Twenty patients received thalidomide/fludarabine as first-line therapy and 20 patients were previously treated. Unmutated IgVH mutation status was found in 36 cases and 13 had high-risk cytogenetic aberrations (del17p, del11q). The overall response rate was 80 and 25% for untreated and previously treated patients, respectively. Although thalidomide reduced the number of CLL cells, the number of CD3 lymphocytes showed no significant change, but the number of CD4(+)CD25(hi)FOXP3(+) regulatory T cells (Tregs) was significantly decreased. Gene expression profiling revealed a thalidomide-induced signature containing both targets known to have a function in immunomodulatory drug action as well as novel candidate genes. Combined thalidomide/fludarabine therapy demonstrated efficacy in high-risk patients with CLL. Furthermore, our study provides novel biological insights into thalidomide effect, which might act by enhancing apoptosis of CLL cells and reducing Tregs, thereby enabling T-cell-dependent antitumor effect.