Abstract The bone marrow niche has a pivotal role in progression, survival, and drug resistance of multiple myeloma cells. Therefore, it is important to develop means for targeting the multiple myeloma bone marrow microenvironment. Myeloma-associated macrophages (MAM) in the bone marrow niche are M2 like. They provide nurturing signals to multiple myeloma cells and promote immune escape. Reprogramming M2-like macrophages toward a tumoricidal M1 phenotype represents an intriguing therapeutic strategy. This is especially interesting in view of the successful use of mAbs against multiple myeloma cells, as these therapies hold the potential to trigger macrophage-mediated phagocytosis and cytotoxicity. In this study, we observed that MAMs derived from patients treated with the immunomodulatory drug (IMiD) lenalidomide skewed phenotypically and functionally toward an M1 phenotype. Lenalidomide is known to exert its beneficial effects by modulating the CRBN-CRL4 E3 ligase to ubiquitinate and degrade the transcription factor IKAROS family zinc finger 1 (IKZF1). In M2-like MAMs, we observed enhanced IKZF1 levels that vanished through treatment with lenalidomide, yielding MAMs with a bioenergetic profile, T-cell stimulatory properties, and loss of tumor-promoting capabilities that resemble M1 cells. We also provide evidence that IMiDs interfere epigenetically, via degradation of IKZF1, with IFN regulatory factors 4 and 5, which in turn alters the balance of M1/M2 polarization. We validated our observations in vivo using the CrbnI391V mouse model that recapitulates the IMiD-triggered IKZF1 degradation. These data show a role for IKZF1 in macrophage polarization and can provide explanations for the clinical benefits observed when combining IMiDs with therapeutic antibodies. See related Spotlight on p. 254