Inclusion Criteria:

• Understand and voluntarily sign an informed consent form.
• Able to adhere to the study visit schedule and other protocol requirements.
• Age >=18 years at the time of signing the informed consent form.
• Patient must have histopathologically confirmed B-cell CLL
• For Phase I only: Untreated or minimally treated patients (patients who have received only prior single agent rituximab) are eligible. For those patients who have had rituximab monotherapy, last dose must be greater than 90 days prior to beginning study treatment.
• For Phase II only: Untreated B-cell CLL patients only.
• Rai staging, will be employed. Patients must have Rai stage III/IV disease (irrespective of symptoms) OR symptomatic Rai stage 0-II disease, requiring therapy as defined by the NCI 1996 guidelines, which are as follows:
• A minimum of any one of the following disease-related symptoms must be present: Weight loss >= 10% within the previous 6 months, Extreme fatigue (ECOG PS <= 2), Fevers of greater than 100.5° F for >= 2 weeks without evidence of infection, Night sweats without evidence of infection, Evidence of progressive marrow failure as manifested by the development or worsening of anemia and/or thrombocytopenia, Autoimmune anemia and/or thrombocytopenia (must be controlled prior to study entry), Massive (i.e., > 6 cm below the left costal margin) or progressive splenomegaly, Massive nodes or clusters (i.e., > 10 cm in longest diameter) or progressive lymphadenopathy, Progressive lymphocytosis with an increase of > 50% over a 2 month period, or an anticipated doubling time of less than 6 months
• Platelets must be > 75,000/mm3 and absolute neutrophil count must be > 1000/mm3 within 14 days of starting protocol treatment unless treating physicians deems the neutropenia is related to marrow involvement and then ANC > 750/mm3 is allowed.
• Serum creatinine <=2.0 mg/dl obtained within 14 days of starting protocol treatment. Creatinine clearance as determined by the Cockroft-Gault formula, using ideal body weight, must be > 30 mL/minute.
• AST or ALT must be < 3 x the upper limit of normal within 14 days of starting treatment.
• ECOG performance of 0, 1 or 2.
• Females 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 a successful vasectomy. All patients must be counseled at a minimum of every 28 days about pregnancy precautions and risks of fetal exposure.
• Disease free of prior malignancies for >= 2 years (including carcinoma in situ of the cervix or breast) treated with curative intent and anticipated 5 year disease-free survival is greater than 90%. Any basal cell or squamous cell carcinoma of the skin treated with curative intent is permitted.
• Able to take aspirin (325 mg) daily as prophylactic anticoagulation (patients intolerant to ASA may use low molecular weight heparin).

Exclusion Criteria:

• Major surgery less than 28 days prior to study treatment.
• Prior chemotherapy for CLL of any type (purine analogues, alkylating agents) or radiation therapy. Prior monoclonal antibodies except for rituximab, which is allowed in the Phase I cohort only.
• Any prior use of lenalidomide or thalidomide.
• Concurrent use of other anti-cancer therapies.
• Pregnant or breast feeding females. (Lactating females may be considered if they agree not to breast feed while receiving study treatment and until 12 months following last dose of rituximab).
• History of pulmonary embolus or deep vein thrombosis.
• Clinically significant heart dysfunction, defined as New York Heart Association class III or IV (Appendix B), at the time of screening, or history of myocardial infarction or heart failure within 6 months preceding the first study treatment (cardiac ejection fraction must be >= 50% within 8 weeks of beginning study treatment for any patient with a history of clinically significant heart dysfunction).
• Known positive for HIV, hepatitis B surface Ag, hepatitis B core antibody, or hepatitis C. Mandatory testing is not required, but should be considered in patients deemed high risk or suspicious.
• Active infection requiring oral or intravenous antibiotics at study entry. After infection resolves patient may be evaluated for enrollment.
• Uncontrolled autoimmune hemolytic anemia or idiopathic thrombocytopenia purpura.
• Richter's transformation.
• CNS involvement.
• Other severe, acute, or chronic medical or psychiatric condition, laboratory abnormality, or difficulty complying with protocol requirements that may increase the risk associated with study participation or study drug administration or may interfere with interpretation of study results that in the judgment of the investigator would make the patient inappropriate for this study or that would prevent the patient from signing the informed consent form.
• Use of any other biologic agent or disease-modifying anti-rheumatic drugs (DMARDS).
• Known anaphylaxis or IgE-mediated hypersensitivity to murine proteins or any component of rituximab.