Myelodysplastic syndrome (MDS) with del(5q) is a unique hematopoietic stem cell disease that typically follows an indolent course and demonstrates particular sensitivity to lenalidomide, a second-generation immunomodulatory agent. Early trials demonstrated rapid and durable responses leading to US Food and Drug Administration (FDA) approval in 2005. Definitive confirmatory evidence from a large phase III trial was recently published. Other recent advances include a better understanding of the pathogenesis of disease including haplodeficiency of several candidate genes, and elucidation of the lenalidomide-specific effect on two phosphatases ultimately leading to p53 degradation in the erythroid progenitors and cell cycle arrest in earlier myeloid progenitors. In this review, we describe the pathogenesis of MDS with del(5q), summarize the major clinical studies establishing the activity of lenalidomide in this population, discuss commonly encountered adverse events, and shed light on practical uses of this agent in the clinic.