Lenalidomide combined with dexamethasone is an effective treatment for refractory/relapsed multiple myeloma (MM). Lenalidomide stimulates natural killer (NK) cells and enhances antitumor responses. We assessed NK cell number and function in 25 patients with MM participating in a clinical trial of lenalidomide and dexamethasone. NK cell numbers increased from a mean of 2.20 ± 0.05 × 10(5)/mL (baseline) to a mean of 3.90 ± 0.03 × 10(5)/mL (cycle 6; P = .05); however, in vitro NK-cell-mediated cytotoxicity decreased from 48.9% ± 6.8% to 27.6% ± 5.1% (P = .0028) and could not be rescued by lenalidomide retreatment. Lenalidomide increased normal donor NK-cell cytotoxicity in vitro from 38.5% to 53.3%, but this was completely abrogated by dexamethasone. Dexamethasone suppression of NK cell-mediated cytotoxicity was partially reversed by a 3-day washout, but these cells remained refractory to lenalidomide-induced enhanced function. Lymphocyte subset depletion experiments revealed that lenalidomide's enhancement of NK cell-mediated cytotoxicity was mediated by CD4(+) T-cell production of interleukin 2 and that dexamethasone acted by suppressing interleukin-2 production. Similarly, the reduced ability of NK cells from patients with MM to respond to lenalidomide was also due to impaired CD4 T-cell function. Our findings indicate that lenalidomide immunostimulatory effects on patient NK cells are severely blunted by concurrent dexamethasone administration.