A 67-year-old woman was admitted for investigation of pancytopenia. Bone marrow biopsy was compatible with myelodysplastic syndrome (MDS) with fibrosis. For the next 20 months the patient received transfusions of packed red cells, while a 3-month-trial of erythropoetin was unsuccesful. She was then treated with thalidomide 400mg per day. During the next months, a gradual rise in Hb value was noticed and the patient eventually became transfusion independent. Repeat bone marrow biopsy revealed a significant decrease on the degree of fibrosis. Thalidomide has shown excellent results in the treatment of multiple myeloma probably due to its anti-angiogenic activity. It is possible that in our patient thalidomide acted as an anti-fibrotic agent. It will be very interesting to test this novel activity of thalidomide in a large number of patients.