We investigated the effect of thalidomide, a compound with immunomodulatory and antiangiogenic properties, on lipopolysaccharide (LPS)-mediated induction of cyclooxygenase-2 (Cox-2) and prostaglandin (PG) biosynthesis in murine macrophages. Thalidomide caused a dose-dependent inhibition of LPS-mediated induction of PGE₂ synthesis in RAW 264.7 cells. The induction of Cox-2 protein and mRNA by LPS was also suppressed by thalidomide. Based on the results of nuclear run-off assays and transient transfections, treatment with LPS stimulated Cox-2 transcription, an effect that was unaffected by thalidomide. Thalidomide decreased the stability of Cox-2 mRNA. A series of structural analogues of thalidomide also inhibited LPS-mediated induction of Cox-2 and PGE₂ synthesis. Taken together, these data provide new insights into the antineoplastic and anti-inflammatory properties of thalidomide.