Azacitidine and Lenalidomide for Acute Myeloid Leukemia

Inclusion Criteria: * Newly diagnosed AML age ≥ 60 years, de novo, secondary to prior therapy, or transformed from MDS, as defined by the International Working Group, except acute promyelocytic leukemia (AML M3) will be included for phase 1 and 2 study. Patients must not have abnormalities of inversion 16, t(16,16), del(16q), t(8,21) or t(15,17) as assessed by routine cytogenetics or FISH. Diagnosis of AML by WHO criteria (\>20% blasts) is determined by CBC, bone marrow assessment, and immunophenotypic analysis performed within 2 weeks of study enrollment. No previous treatment for AML, however hydroxyurea, steroids, and leukopheresis are allowed. * Relapsed AML age ≥18 years, except acute promyelocytic leukemia (AML M3), with CR \< 1 years post 1st induction chemotherapy will be included in phase 1 study only. * Primary refractory AML age ≥18 years, except acute promyelocytic leukemia (AML M3) post 1st induction chemotherapy will be included in phase 1 study only. * Relapsed or refractory AML age ≥18 years, except acute promyelocytic leukemia (AML M3), post 1st salvage chemotherapy/ autologous stem transplantation/ allogeneic stem cell transplantation will be included in phase 1 study only. * Understand and voluntarily sign an informed consent form. * Able to adhere to the study visit schedule and other protocol requirements. * ECOG performance status of ≤ 2 at study entry * Life expectancy \> 2 months * WBC \< 10,000 x 10\^6/L (WBC counts may not be reduced by hydroxyurea or leukapheresis to achieve a WBC lower than 10,000 x 106 /L). * Adequate renal and hepatic function as defined by: * Serum creatinine ≤ 1.5X institution ULN * Total bilirubin ≤ 2.0 mg/dL ( except Gilbert's syndrome or known hemolysis) * AST(SGOT) and ALT (SGPT) ≤ 2.5 x ULN * All study participants must be registered into the mandatory Revlimid REMS® program, and be willing and able to comply with the requirements of Revlimid REMS®. * Females of of childbearing potential (FCBP)† must have a negative serum or urine pregnancy test with a sensitivity of at least 50 mIU/mL within 10 - 14 days prior to and again within 24 hours of starting lenalidomide and must either commit to continued abstinence from heterosexual intercourse or begin TWO acceptable methods of birth control, one highly effective method and one additional effective method AT THE SAME TIME, at least 28 days before she starts taking lenalidomide. FCBP must also agree to ongoing pregnancy testing. Men must agree to use a latex condom during sexual contact with a FCBP even if they have had a successful vasectomy. All patients must be counseled at a minimum of every 28 days about pregnancy precautions and risks of fetal exposure. * Men must agree not to father a child and agree to use a latex condom during sexual contact with females of child bearing potential even if they have had a successful vasectomy. -Disease free of prior malignancies for ≥ 5 years with exception of AML, currently treated basal cell, squamous cell carcinoma of the skin, or carcinoma "in situ" of the cervix or breast. Exclusion Criteria: * Newly diagnosed AML age \< 60 years. * Newly diagnosed AML ≥ 60 years with favorable risk cytogenetic abnormalities as defined by SWOG criteria that include: inv(16)/t(16;16)/del(16q), t(15;17) with/without secondary aberrations, t(8;21) lacking del(9q) or complex karyotype 17. Prior to enrollment, FISH studies or routine cytogenetics must be completed to rule out these cytogenetic abnormalities. * Known CNS leukemia * Any serious medical condition, laboratory abnormality, or psychiatric illness that would prevent the subject from signing the informed consent form. * Any condition, including the presence of laboratory abnormalities, which places the subject at unacceptable risk if he/she were to participate in the study or confounds the ability to interpret data from the study. * Use of any other experimental drug or therapy within 30 days of enrollment. * Known hypersensitivity to thalidomide and mannitol. * The development of erythema multiforme if characterized by a desquamating rash while taking thalidomide or similar drugs. * Any prior use of lenalidomide * Any prior use of azacytidine. * Concurrent use of other anti-cancer agents or treatments (with the exception of steroids) * Known positive for HIV or infectious hepatitis, type A, B or C.