Background Lenalidomide is a thalidomide analogue that may serve as an adjunctive therapy for treatment refractory cutaneous lupus erythematosus (CLE). Objectives We evaluate the use of lenalidomide in CLE and describe the skin and circulating leukocyte profile of treatment refractory patients before and after treatment. Patients/Methods Five subjects were treated with lenalidomide in an unblinded open-label study. Immunohistochemistry of skin was performed for T-cell markers, glycosaminoglycans and CXCL10, an interferon (IFN)-inducible chemokine, before and after treatment. Immunophenotyping and measurement of IFN-inducible genes from peripheral blood mononuclear cells was also performed before and after treatment. Results Four subjects demonstrated clinical improvement of their skin, however one of these responders subsequently developed symptoms of systemic lupus erythematosus. Small changes in rare circulating leukocyte subsets, plasmacytoid dendritic cells and regulatory T-cells, were observed with treatment and may correlate with clinical response. Treatment was associated with increased circulating HLA-DR expression and decreased markers of IFN-mediated pathways, regardless of clinical response. Limitations Our results are limited by small sample size and the measurement of rare populations of circulating cell subsets. Conclusions Lenalidomide may have utility as therapy for severe, treatment refractory CLE. However, our preliminary data suggest that lenalidomide may activate T-cells and trigger systemic disease in some CLE patients. We also saw a unique histologic and circulating leukocyte phenotype in the nonresponding subject. Further characterization of the skin and circulating leukocyte profile of treatment refractory patients will improve our understanding of CLE.