The chemotherapeutic agent temozolomide (TMZ) and the anti-angiogenic agent thalidomide (THD) have both demonstrated anti-tumor activity in patients with recurrent malignant glioma. Combination treatment with TMZ and THD in patients with glioblastoma multiforme (GBM) appears to be more effective than treatment with either drug alone. To investigate the mechanism of this anti-tumor effect, we examined the combined effects of TMZ and THD in a rat glioma xenograft model. We found that combination treatment markedly inhibited the growth of tumors that were orthotopically implanted into rat brains. Using proliferating cell nuclear antigen (PCNA) staining, we observed a significant decrease in cell proliferation in these tumors. CD31 staining of the microvasculature revealed a significant decrease in angiogenesis. We also found increased apoptosis in treated tumors by terminal deoxynucleotidyl-mediated deoxyuridine triphosphate nick-end labeling (TUNEL) assay. We further demonstrated that the expression of angiogenic factors, such as vascular endothelial cell growth factor (VEGF) and basic fibroblastic growth factor (bFGF), were inhibited by THD. THD also decreased the number of ED1-positive, activated macrophages or microglial cells, which produce pro-angiogenic molecules around the glioma. Taken together, these results suggest that combination treatment with TMZ and THD inhibits tumor growth via the induction of apoptosis and the inhibition of angiogenesis in a rat model and may be a promising therapy for malignant gliomas.