Multiple myeloma (MM) cells home to and adhere to extracellular matrix proteins and to bone marrow stromal cells (BMSCs); and in the BM microenvironment, grow, survive, resist drugs, and migrate under the influence of cytokines including interleukin-6, vascular endothelial growth factor, tumor necrosis factor alpha, and insulin-like growth factor (IGF)-1. Proliferation is via the Ras/Raf MAPK cascade, drug resistance via PI3-K/Akt signaling, and migration via PKC dependent pathways. Novel therapies that target not only the MM cell, but also the BM microenvironment, can overcome drug resistance in vitro and in vivo in murine human MM models. For example, immunomodulatory derivatives of thalidomide (IMiDs) and the proteasome inhibitor PS-341 both induce apoptosis of MM cell lines and patient cells refractory to melphalan, doxorubicin, and dexamethasone; abrogate MM cell binding to fibronectin and BMSCs and related protection against immune- and drug-induced apoptosis; block production of cytokines which promote MM cell growth, survival, drug resistance, and migration; inhibit angiogenesis; and stimulate host anti-tumor immunity. In the setting of relapsed refractory MM, a Phase I trial of the IMiD CC5013 shows stable paraprotein or better in 20 of 24 (79%) patients, with a favorable toxicity profile. In this same patient population 85% of 54 patients treated in a Phase II trial of PS-341 achieved either paraprotein response (50%) or stable disease (35%). Cellular and gene microarray studies comparing PS-341 and an IkappaB kinase inhibitor, PS-1145, suggest that selective NF-kappaB blockade cannot account for all the anti-MM activity of PS-341. Finally, cellular and signaling studies provide the preclinical rationale for combining these novel agents with conventional therapies, or with each other, to enhance efficacy. These novel therapeutics therefore represent a new treatment paradigm in MM targeting the tumor cell in its microenvironment to overcome classical drug resistance and improve patient outcome. Future studies should define the utility of these agents as primary therapy, treatment for first relapse, and maintenance therapy.