<i>Objective:</i> To analyze the efficacy of oral thalidomide in the treatment of advanced hepatocellular carcinoma (HCC). <i>Methods:</i> Sixty-eight patients with unresectable and nonembolizable HCC were consecutively enrolled in a compassionate treatment program of oral thalidomide. Tumor response and treatment-related toxicity were prospectively followed. Thalidomide was given at a starting dose of 200 mg per day. The dose was gradually escalated in 100-mg steps up to 600 mg per day if no limiting toxicities developed. <i>Results:</i> Sixty-three patients were evaluable for response. One complete and 3 partial responses, defined by World Health Organization criteria, were seen, with a response rate of 6.3% (95% CI 0–12.5). The duration of response was 50+, 24.6, 11.6+ and 8.7+ weeks, respectively. All 4 responders had a dramatic decrease in α-fetoprotein (α-FP) levels. Another 6 of the 42 patients with elevated α-FP levels before treatment had a more than 50% decrease in their α-FP levels after thalidomide treatment. Totally 10 patients had an objective response to thalidomide. The median overall survival for all of the 68 patients was 18.7 weeks (95% CI 11.8– 25.6) with a 1-year survival rate of 27.6%. The median overall survival of the 10 patients with an objective response to thalidomide was 62.4 weeks (95% CI 31.2–93.6 weeks). All responders responded at a dose equal to or less than 300 mg per day. Toxicities of thalidomide were generally manageable, and only 16, 6, and 0 patients developed grade 2, 3, and 4 toxicities, respectively. <i>Conclusion:</i> Low-dose thalidomide is safe and induces unequivocal tumor response in a minority of patients with advanced HCC.