Inhalation of crystalline silica particles causes silicosis, which is a severe inflammatory lung disease that is associated with granulomatous and fibrotic responses. We investigated whether silica-induced silicosis might promote airway hyperreactivity (AHR) and the role of TNF-α and thalidomide in this process. Mice received an intranasal instillation of silica particles (1.25, 5, and 10 mg/mouse) and given methacholine on days 2, 7, and 28 after provocation or 5-HT challenges on day 7 after provocation. AHR was assessed using invasive whole-body plethysmography. Lung-tissue samples were collected for TNF-α measurements and histological analyses. Thalidomide was given orally from days 21–27 after silica administration. We found that following aerosolised methacholine or 5-HT treatment, a state of AHR was induced with silica-particle amounts of 5 and 10 mg/mouse, but not 1.25 mg/mouse. The effect was apparent within 2 days and remained for at least 28 days. Silica-particle amounts of 5 and 10 mg/mouse also induced significant granuloma response correlating with the silica required to induce AHR. In addition, a parallel was also observed between the elevation of lung tissue levels of TNF-α and AHR. Notably, silica-induced granulomatous and AHR responses were abolished in TNFR1‾/‾ mice compared to wild-type mice. Moreover, the blockade of ongoing TNF-α generation by thalidomide prevented both events. Our findings suggest that exposure of mice to silica particles leads to a granulomatous lung response marked by non-specific AHR induced by TNF-α. In addition, the results indicate that thalidomide can control silica-induced pathological features of the lungs by blocking TNF-α generation.