Background: Cereblon, an extensively studied multifunctional protein, is a Cullin 4-RING E3 ubiquitin ligase complex component and a well-known target of thalidomide and its derivatives. Cereblon is involved in the apoptosis of multiple myeloma cells. When ligands such as lenalidomide bind to cereblon, it recognizes various neosubstrates based on the ligand shape and properties. We have identified novel CRBN inhibitors, namely DHFO and its analogs, with structural features that are slightly different from thalidomide but stronger cereblon-binding affinity. We selected indanedione and indanone derivatives from the literature to understand and compare their cereblon-mediated substrate recognition potential. Methods: Computational investigations of possible cereblon inhibitors were investigated by molecular docking. ADME/T and drug-likeness properties of the molecules were studied. A molecular dynamics study was carried out for selected molecules, and the molecular interactions were analyzed using PCA-based FEL methods. The binding affinity was calculated using the MM-PBSA method. Results: We conducted computational investigations on 68 indanedione and indanone derivatives binding with cereblon. Ten molecules showed better CRBN binding affinity than thalidomide. We studied the drug-likeness properties of the selected ten molecules, and four of the most promising molecules (DHFO, THOH, DIMS, and DTIN) were chosen for molecular dynamics studies. The MM/PBSA calculations showed that the DHFO, already shown to be a 5-LOX/COX2 inhibitor, has the highest binding affinity of -163.16 KJ/mol with cereblon. Conclusion: The selected CRBN inhibitor DHFO has demonstrated the highest binding affinity with cereblon protein compared to other molecules. DHFO creates an interaction hotspot on the cereblon surface, thereby serving as a novel alternative for thalidomide and its derivatives. Ease of chemical synthesis, low toxicity, versatile therapeutic options, and pleiotropism of DHPO analogues provide an opportunity for exploring clinical alternatives with versatile therapeutic potential for a new category of indanedione molecules as novel modulators of E3 ubiquitin ligases.