Inclusion Criteria:

- Previous diagnosis of primary sclerosing cholangitis as defined by: serum alkaline
phosphatase level greater than or equal to 1.5 times the upper limit of normal,
negative serum antimitochondrial antibody test, cholangiography diagnostic of PSC
without other etiology for biliary obstruction, and liver histology consistent with
or diagnostic of PSC

- Patients must give written informed consent.

- Patients must be willing and able to comply with the most recent version of the
FDA-mandated System for Thalidomide Education and Prescribing Safety (S.T.E.P.S.®)
program.

Exclusion Criteria:

- Pregnant and/or lactating female

- Inability or unwillingness to practice contraceptive measures for the prevention of
pregnancy

- History of hypersensitivity reaction to thalidomide

- Inability to provide consent

- Findings suggestive of liver disease of other etiology such as primary biliary
cirrhosis, chronic alcoholic liver disease, chronic hepatitis B and C infection,
hemochromatosis, Wilson's disease, alpha-1-antitrypsin deficiency, autoimmune
hepatitis, and cryptogenic liver disease

- Anticipated need for liver transplantation in one year from decompensated chronic
liver disease or recurrent variceal bleeding, spontaneous hepatic encephalopathy, or
refractory ascites

- Treatment with tacrolimus, cyclosporine, sirolimus, ursodeoxycholic acid,
corticosteroids, colchicine, methotrexate, azathioprine, cyclosporine, chlorambucil,
budesonide, pentoxifylline, nicotine, silymarin, vitamin E or pirfenidone in the
preceding three months

- History of peripheral neuropathy

- Use of medications with significant drug-drug interactions with thalidomide

- History of Human Immunodeficiency Virus (HIV) positive status or Acquired
Immunodeficiency Syndrome (AIDS)

- History of coexistent advanced malignancy

- History of coexistent severe cardiovascular disease

- History of coexistent severe renal disease

- History of current excessive or recent (within 6 months) alcohol use

- Any condition that, in the opinion of the investigators, would interfere with the
patient's ability to complete the study safely or successfully

- History of thrombolytic events. Combination use with corticosteroids increases risk
of deep vein thrombosis.