We report the results of a non-randomized phase II study of low-dose thalidomide plus low-dose dexamethasone therapy in 66 patients with refractory multiple myeloma. The overall response rate (near complete, partial and minimal response) was 63.6%, and progression-free and overall survival periods were 6.2 and 25.4 months. In adverse events, the incidence of peripheral neuropathy and deep vein thrombosis was lower than the data reported in USA and Europe. On the other hand, leukopenia was observed in 41% of patients, including 11% of those with Grade 3. Leukopenia was closely related to pretreatment pancytopenia, especially thrombocytopenia. The incidence of adverse events related to dexamethasone was low. In conclusion, low-dose thalidomide plus low-dose dexamethasone therapy was as effective as high-dose thalidomide plus high-dose dexamethasone therapy in patients with refractory multiple myeloma. Leukopenia is one of the most serious adverse events in Japanese patients, especially in patients with pretreatment pancytopenia.