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 (#NCT01688466) to determine the 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 per day orally (n = 17; low-dose cohort) or 2 mg per day at a starting dose of 0.5 mg per day increasing to 2 mg per day over 6 weeks (n = 17; high-dose cohort). The primary endpoint was overall response rate (ORR) at 6 months according to the 2005 National Institutes of Health cGVHD Response Criteria. Thirty-two patients had severe sclerotic skin and received a median of 5 (range, 2-10) previous systemic therapies. ORR was 47% (95% confidence interval, 30-65) in the intention-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 National Institutes of Health joint/fascia scores (P = .018). Median change from the baseline in body surface area involvement of skin cGVHD was −7.5% (–10% to 35%; P = .002). The most frequent adverse events were lymphopenia, infection, and fatigue. Eight subjects in the high-dose cohort had dose decreases because of adverse events. There was 1 death in the low-dose cohort from bacterial pneumonia. Our data indicate antifibrotic effects of pomalidomide and possible association with increases in concentrations of blood regulatory T-cell and interleukin-2. Pomalidomide 0.5 mg per day is a safe and effective therapy for advanced corticosteroid-refractory cGVHD. Key Points: • Pomalidomide is a safe and effective therapy for severe cGVHD, including sclerotic skin manifestations. • The recommended dose is pomalidomide 0.5 mg per day orally.