Lenalidomide has demonstrated clinical activity in patients with chronic lymphocytic leukemia (CLL), even though it is not cytotoxic for primary CLL cells in vitro. We examined the direct effect of lenalidomide on CLL-cell proliferation induced by CD154-expressing accessory cells in media containing interleukin-4 and -10. Treatment with lenalidomide significantly inhibited CLL-cell proliferation, an effect that was associated with the p53-independent upregulation of the cyclin-dependent kinase inhibitor, p21^WAF1/Cip1 (p21). Silencing p21 with small interfering RNA impaired the capacity of lenalidomide to inhibit CLL-cell proliferation. Silencing cereblon, a known molecular target of lenalidomide, impaired the capacity of lenalidomide to induce expression of p21, inhibit CD154-induced CLL-cell proliferation, or enhance the degradation of Ikaros family zinc finger proteins 1 and 3. We isolated CLL cells from the blood of patients before and after short-term treatment with low-dose lenalidomide (5 mg per day) and found the leukemia cells were also induced to express p21 in vivo. These results indicate that lenalidomide can directly inhibit proliferation of CLL cells in a cereblon/p21-dependent but p53-independent manner, at concentrations achievable in vivo, potentially contributing to the capacity of this drug to inhibit disease-progression in patients with CLL.