Lenalidomide is an orally active immunomodulatory drug that has direct antineoplastic activity and indirect effects mediated through multiple types of immune cells found in the tumor microenvironment, including B, T, natural killer (NK), and dendritic cells. Recently, the E3 ubiquitin ligase cereblon was identified as a molecular target that may underlie the effects of lenalidomide on tumor cells, as well as on cells in the tumor microenvironment. Decreases in cereblon attenuate these effects and also confer resistance to lenalidomide. Tumoricidal effects of lenalidomide are associated with reduced interferon regulatory factor 4, a downstream target of cereblon. Lenalidomide stimulates proliferation and activation of NK cells, thereby enhancing NK cell-mediated cytotoxicity and antibody-dependent cellular cytotoxicity. These effects appear to be secondary to cytokine production from T cells. Lenalidomide has been shown to produce synergistic effects in experimental models when evaluated in combination with rituximab, dexamethasone, bortezomib, and B-cell receptor signaling inhibitors, consistent with mechanisms complementary to these agents. These experimental findings have translated to the clinic, where single-agent use displays durable responses in relapsed/refractory non-Hodgkin lymphoma, and combination with rituximab and other agents leads to improved responses at first line and in relapsed/refractory disease. The activity of lenalidomide is evident across multiple lymphoma subtypes, including indolent and aggressive forms. The interaction among cell types in the immune microenvironment is increasingly recognized as important to tumor cell recognition and destruction, as well as to protection of normal immune cells, as reflected by lenalidomide studies across multiple types of B-cell lymphomas.