The “Thalidomide tragedy” is a landmark in the history of the pharmaceutical industry. Despite limited clinical trials, there is a continuous effort to investigate thalidomide as a drug for cancer and inflammatory diseases such as rheumatoid arthritis, lepromatous leprosy, and COVID-19. This review focuses on the possibilities of targeting inflammation by repurposing thalidomide for the treatment of idiopathic pulmonary fibrosis (IPF). Articles were searched from the Scopus database, sorted, and selected articles were reviewed. The content includes the proven mechanisms of action of thalidomide relevant to IPF. Inflammation, oxidative stress, and epigenetic mechanisms are major pathogenic factors in IPF. Transforming growth factor-β (TGF-β) is the major biomarker of IPF. Thalidomide is an effective anti-inflammatory drug in inhibiting TGF-β, interleukins (IL-6 and IL-1β), and tumour necrosis factor-α (TNF-α). Thalidomide binds cereblon, a process that is involved in the proposed mechanism in specific cancers such as breast cancer, colon cancer, multiple myeloma, and lung cancer. Cereblon is involved in activating AMP-activated protein kinase (AMPK)-TGF-β/Smad signalling, thereby attenuating fibrosis. The past few years have witnessed an improvement in the identification of biomarkers and diagnostic technologies in respiratory diseases, partly because of the COVID-19 pandemic. Hence, investment in clinical trials with a systematic plan can help repurpose thalidomide for pulmonary fibrosis. Graphical Abstract