Lenalidomide is a synthetic derivative of thalidomide currently approved by the US Food and Drug Administration for use in patients affected by multiple myeloma (in combination with dexamethasone) and low or intermediate-1 risk myelodysplastic syndromes that harbor 5q cytogenetic abnormalities. For illustrative purposes, the mechanism of action of lenalidomide can be subdivided into a cancer cell-intrinsic, a stromal, and an immunological component. Indeed, lenalidomide not only exerts direct cell cycle-arresting and pro-apoptotic effects on malignant cells, but also interferes with their physical and functional interaction with the tumor microenvironment and mediates a robust, pleiotropic immunostimulatory activity. In particular, lenalidomide has been shown to stimulate the cytotoxic functions of T lymphocytes and natural killer cells, to limit the immunosuppressive impact of regulatory T cells, and to modulate the secretion of a wide range of cytokines, including tumor necrosis factor α, interferon γ as well as interleukin (IL)-6, IL-10, and IL-12. Throughout the last decade, the antineoplastic and immunostimulatory potential of lenalidomide has been investigated in patients affected by a wide variety of hematological and solid malignancies. Here, we discuss the results of these studies and review the status of clinical trials currently assessing the safety and efficacy of this potent immunomodulatory drug in oncological indications.