Steroid-refractory chronic graft-versus-host disease (cGvHD) is a therapeutic challenge. Sclerotic skin manifestations are especially difficult to treat. We conducted a randomized phase-2 clinical trial to determine safety, efficacy, and preferred dose of pomalidomide in persons with moderate to severe cGvHD unresponsive to corticosteroids and/or subsequent lines of therapy. Thirty-four subjects were randomized to receive pomalidomide, 0.5 mg/d; LD) orally (n=17) or 2 mg/d at a starting dose of 0.5 mg/d increasing to 2 mg/d over 6 weeks (n=17, HD). Primary endpoint was overall response rate (ORR) at 6 months according to the 2005 NIH cGvHD Response Criteria. Thirty-two had severe sclerotic skin and received a median of 5 (range, 2-10) prior systemic therapies. ORR was 47% (95% confidence interval [95% CI], 30, 65%) in intent-to-treat analyses. All were partial responses with no difference in ORR between the cohorts. ORR was 67% (45-84%) in the 24 evaluable subjects at 6 months. Nine had improvement in NIH joint/fascia scores (p=0.018). Median change from the baseline in body surface area (BSA) of involved skin cGvHD was -7.5% (-10 to +35; p=0.002). The most frequent adverse events (AEs) were lymphopenia, infection, and fatigue. Eight subjects in the HD cohort had dose decreases because of AEs. There was one death in the LD cohort from bacterial pneumonia. Our data indicate anti-fibrotic effects of pomalidomide and possible association with increases in concentrations of blood regulatory T-cell and IL-2. Pomalidomide, 0.5 mg/d, is a safe and effective therapy of advanced corticosteroid-refractory cGvHD.