Lenalidomide was approved by the US Food and Drug Administration (FDA) for treatment of transfusion-dependent lower-risk myelodysplastic syndrome patients with deletion (del) (5q) alone or with additional karyotype abnormalities. The approval was based on high rates of prolonged transfusion independence and complete cytogenetic response in this subset. In lower-risk non-del(5q) patients, meaningful erythroid responses also were reported with a low frequency of cytogenetic improvement, although inferior to that observed in the del(5q) patients. There is now a better understanding of the mechanism of the karyotype-dependent drug action, explaining the disparate response rates and frequency of myelosuppression. In del(5q) patients, lenalidomide suppresses the clone by inhibiting the nuclear sequestration of the haplodeficient cell cycle regulatory protein cdc25c, thereby promoting selective G2 arrest and apoptosis. In non-del(5q) patients, lenalidomide enhances erythropoietin receptor signaling. Future directions include use of biologic and molecular markers as predictive tools to select patients and use of combination strategies to overcome resistance to lenalidomide in del(5q) patients or enhance erythropoiesis in non-del 5 patients.