Lenalidomide (Revlimid^®; CC-5013) and pomalidomide (CC-4047) are IMiDs^® proprietary drugs having immunomodulatory properties that have both shown activity in cancer clinical trials; lenalidomide is approved in the United States for a subset of MDS patients and for treatment of patients with multiple myeloma when used in combination with dexamethasone. These drugs exhibit a range of interesting clinical properties, including anti-angiogenic, anti-proliferative, and pro-erythropoietic activities although exact cellular target(s) remain unclear. Also, anti-inflammatory effects on LPS-stimulated monocytes (TNF-α is decreased) and costimulatory effects on anti-CD3 stimulated T cells, (enhanced T cell proliferation and proinflammatory cytokine production) are observed These drugs also cause augmentation of NK-cell cytotoxic activity against tumour-cell targets. Having shown that pomalidomide confers T cell-dependant adjuvant-like protection in a preclinical whole tumour-cell vaccine-model, we now show that lenalidomide and pomalidomide strongly inhibit T-regulatory cell proliferation and suppressor-function. Both drugs inhibit IL-2-mediated generation of FOXP3 positive CTLA-4 positive CD25^high CD4+ T regulatory cells from PBMCs by upto 50%. Furthermore, suppressor function of pre-treated T regulatory cells against autologous responder-cells is abolished or markedly inhibited without drug related cytotoxicity. Also, Balb/C mice exhibit 25% reduction of lymph-node T regulatory cells after pomalidomide treatment. Inhibition of T regulatory cell function was not due to changes in TGF-β or IL-10 production but was associated with decreased T regulatory cell FOXP3 expression. In conclusion, our data provide one explanation for adjuvant properties of lenalidomide and pomalidomide and suggest that they may help overcome an important barrier to tumour-specific immunity in cancer patients.