We performed a placebo-controlled study to evaluate the effects of immunomodulatory treatment with thalidomide on HIV levels, TNF-alpha levels, and immune status of 31 HIV-infected individuals, after temporary suppression of viral replication with antiretroviral drugs. Treatment with a combination of zidovudine and lamivudine (ZDV/LMV) for 14 days resulted in a median decline in plasma viremia of 1.94 log10 RNA equivalents/ml. After discontinuation of ZDV/LMV, thalidomide therapy (200 mg/day for 4 weeks) did not retard the prompt return of HIV titers to the pretreatment levels, and had no effect on plasma levels of TNF-alpha. In contrast, thalidomide treatment resulted in significant immune stimulation. We observed increased levels of plasma soluble IL-2 receptor, soluble CD8 antigen, and IL-12 (p < 0.01 for all parameters), as well as increased cutaneous delayed-type hypersensitivity reactions to recall antigens (p < 0.01) in thalidomide-treated patients. These changes were associated with a median increase in HIV titer of 0.2 log10 RNA equivalents/ml in the thalidomide-treated group (p < 0.05), which resolved after stopping the drug. Further studies were performed in vitro to elucidate the mechanism of thalidomide-induced immune stimulation. When purified T cells from HIV-infected individuals were stimulated by immobilized anti-CD3 in the presence of thalidomide, a costimulatory effect of the drug was observed, resulting in increased production of IL-2 and IFN-gamma, and increased T cell-proliferative responses. Further experiments showed that thalidomide increased IL-12 production by antigen-presenting cells in a T cell-dependent manner. Our findings suggest a potential application for thalidomide as a novel immune adjuvant in HIV disease.