Inclusion Criteria:

- Newly diagnosed AML age ≥ 60 years, de novo, secondary to prior therapy, or
transformed from MDS, as defined by the International Working Group 16, except acute
promyelocytic leukemia (AML M3) will be included for phase 1 and 2 study. Patients
must not have abnormalities of inversion 16, t(16,16), del(16q), t(8,21) or t(15,17)
as assessed by routine cytogenetics or FISH. Diagnosis of AML by WHO criteria (>20%
blasts) is determined by CBC, bone marrow assessment, and immunophenotypic analysis
performed within 2 weeks of study enrollment. No previous treatment for AML, however
hydroxyurea, steroids, and leukopheresis are allowed.

- Relapsed AML age ≥18 years, except acute promyelocytic leukemia (AML M3), with CR < 1
years post 1st induction chemotherapy will be included in phase 1 study only.

- Primary refractory AML age ≥18 years, except acute promyelocytic leukemia (AML M3)
post 1st induction chemotherapy will be included in phase 1 study only.

- Relapsed or refractory AML age ≥18 years, except acute promyelocytic leukemia (AML
M3), post 1st salvage chemotherapy/ autologous stem transplantation/ allogeneic stem
cell transplantation will be included in phase 1 study only.

- Understand and voluntarily sign an informed consent form.

- Able to adhere to the study visit schedule and other protocol requirements.

- ECOG performance status of ≤ 2 at study entry (see Appendix 2).

- Life expectancy > 2 months

- WBC < 10,000 x 10^6/L (WBC counts may not be reduced by hydroxyurea or leukapheresis
to achieve a WBC lower than 10,000 x 106 /L).

- Adequate renal and hepatic function as defined by:

- Serum creatinine ≤ 1.5X institution ULN

- Total bilirubin ≤ 2.0 mg/dL ( except Gilbert's syndrome or known hemolysis)

- (SGOT) and ALT (SGPT) ≤ 2.5 x ULN

- All study participants must be registered into the mandatory RevAssist® program, and
be willing and able to comply with the requirements of RevAssist®.

- Females of of childbearing potential (FCBP)† must have a negative serum or urine
pregnancy test with a sensitivity of at least 50 mIU/mL within 10 - 14 days prior to
and again within 24 hours of starting lenalidomide and must either commit to
continued abstinence from heterosexual intercourse or begin TWO acceptable methods of
birth control, one highly effective method and one additional effective method AT THE
SAME TIME, at least 28 days before she starts taking lenalidomide. FCBP must also
agree to ongoing pregnancy testing. Men must agree to use a latex condom during
sexual contact with a FCBP even if they have had a successful vasectomy. All
patients must be counseled at a minimum of every 28 days about pregnancy precautions
and risks of fetal exposure. See Appendix: Risks of Fetal Exposure, Pregnancy
Testing Guidelines and Acceptable Birth Control Methods, AND also Appendix 5:
Education and Counseling Guidance Document.

- Men must agree not to father a child and agree to use a latex condom during sexual
contact with females of child bearing potential even if they have had a successful
vasectomy. (See Appendix 3 Pregnancy Testing Guidelines and Acceptable Birth Control
Methods.)

- Disease free of prior malignancies for ≥ 5 years with exception of AML, currently
treated basal cell, squamous cell carcinoma of the skin, or carcinoma "in situ" of
the cervix or breast.

Exclusion Criteria:

- Newly diagnosed AML age < 60 years.

- Newly diagnosed AML ≥ 60 years with favorable risk cytogenetic abnormalities as
defined by SWOG criteria that include: inv(16)/t(16;16)/del(16q), t(15;17)
with/without secondary aberrations, t(8;21) lacking del(9q) or complex karyotype 17.
Prior to enrollment, FISH studies or routine cytogenetics must be completed to rule
out these cytogenetic abnormalities.

- Known CNS leukemia

- Any serious medical condition, laboratory abnormality, or psychiatric illness that
would prevent the subject from signing the informed consent form.

- Any condition, including the presence of laboratory abnormalities, which places the
subject at unacceptable risk if he/she were to participate in the study or confounds
the ability to interpret data from the study.

- Use of any other experimental drug or therapy within 30 days of enrollment.

- Known hypersensitivity to thalidomide and mannitol.

- The development of erythema multiforme if characterized by a desquamating rash while
taking thalidomide or similar drugs.

- Any prior use of lenalidomide

- Any prior use of azacytidine.

- Concurrent use of other anti-cancer agents or treatments (with the exception of
steroids)

- Known positive for HIV or infectious hepatitis, type A, B or C.