It is widely accepted that tumor necrosis factor alpha (TNF-α) plays a critical role in the development of tissue and nerve damage in leprosy and during the reactional episodes of acute inflammation. Thalidomide (N-α-phthalimidoglutarimide), a drug used to treat leprosy reaction, modulates immune response, inhibits inflammation and NF-κB activity. Here we investigated whether thalidomide inhibits NF-κB activation induced by Mycobacterium leprae, p38 and ERK1/2 MAPK activation. EMSA and supershift assays were performed to investigate NF-κB activation in response to M. leprae and its modulation following in vitro treatment with thalidomide. Luciferase assay was assayed in transfected THP-1 cells to determine NF-κB transcriptional activity. Flow cytometry and immunofluorescence were used to investigate p65 accumulation in the nucleus. Immunoblotting was used to investigate p38 and ERK1/2 phosphorylation. Following activation of PBMC and monocytes with M. leprae, the formation and nuclear localization of NF-κB complexes composed mainly of p65/p50 and p50/p50 dimers was observed. Induction of NF-κB activation and DNA binding activity was inhibited by thalidomide. The drug also reduced M. leprae-induced TNF-α production and inhibited p38 and ERK1/2 activation. Definition of the activation mechanisms in cells stimulated with M. leprae can lead to the development of new therapy applications to modulate NF-κB activation and to control the inflammatory manifestations due to enhanced TNF-α response as observed in leprosy and in leprosy reactions.