• The study drug CC-5103 will be administered orally once daily for 21 days followed by 7 days of no CC-5103 (this will be one 28 day treatment cycle). This cycle will repeat itself every 28 days as long as the patient is tolerating the medication and there is no disease progression.
• Starting on the second week, patients will begin treatment with rituximab intravenously once a week for 4 weeks (week 2-5). Prior to each treatment, patients will receive medications to prevent or reduce the side effects of rituximab (benadryl, tylenol and possible decadron). During the infusion, the patients'''' blood pressure and pulse will be monitored frequently and the rate of infusion may decrease depending upon the side effects. Blood work will also be performed each week.
• On week 12 the disease status will be evaluated. A physical exam, blood test, CT scan and bone marrow biopsy may be repeated if necessary to fully evaluate the disease. If the disease has gone away completely, some tests may be repeated again to confirm this.
• If the disease has gotten worse after 12 weeks, then the patient will be removed from the study.
• If the disease is stable or getting better, the patient will continue with therapy. During weeks 13-16 rituximab infusions will be repeated and CC-5103 will continue to be taken daily for 21 days followed by 7 days of rest. This 28 day cycle may be repeated until the patient has completed 48 weeks (12 months) of treatment as long as the side effects are acceptable and the disease does not progress.
• All patients will undergo an off-study evaluation that includes a physical exam, blood work, CT scans and bone marrow biopsy. If the patient completes 78 weeks of therapy and the disease does not get worse, they will be evaluated every 12 weeks to determine the status of their disease for up to 2 years.

Inclusion Criteria:

• Clinicopathological diagnosis of Waldenstrom''''s macroglobulinemia using consensus panel criteria
• Age 18 years or older
• CD20 positive based on any previous bone marrow immunohistochemistry or flow cytometric analysis
• All previous cancer therapy, including radiation, hormonal therapy and surgery, must have been discontinued at least 4 weeks prior to treatment in this study
• Measurable disease, defined as presence of immunoglobulin M paraprotein with a minimum IgM level of equal to or greater than 2 times the upper limit of normal.
• ECOG performance status of 0-2
• Absolute neutrophil count ≥ 100,000,000/L
• Platelet count ≥ 50,000,000,000/L
• Hemoglobin > 8 g/dL
• Serum creatinine < 2.5 mg/dL
• Total bilirubin < 1.5 mg/dL
• AST and ALT < 2.5 x ULN
• Disease free of prior malignancies fir 5 years with exception of currently treated basal cell, squamous cell carcinoma of the skin, or carcinoma in situ of the cervix or breast

Exclusion Criteria:

• Any serious medical condition, laboratory abnormality, or psychiatric illness
• Pregnant or lactating women
• Prior therapy with rituximab or CC-5103
• Known hypersensitivity to thalidomide
• Development of erythema nodosum if characterized by a desquamating rash while taking thalidomide or similar drugs.
• Concurrent use of other anti-cancer agents or treatments