A 29-year-old male underwent allogeneic bone marrow transplantation for progressive multiple myeloma. His post-transplant course was complicated by severe chronic pulmonary graft-versus-host disease (GVHD) resistant to cyclosporin A, corticosteroids and azathioprine. The introduction of thalidomide resulted in a dramatic improvement in his lung function which has been maintained even after cessation of thalidomide. He remains well 40 months after transplantation.