RATIONALE: Drugs used in chemotherapy use different ways to stop cancer cells from dividing so they stop growing or die. Combining chemotherapy with peripheral stem cell or bone marrow transplantation may allow the doctor to give higher doses of chemotherapy drugs and kill more cancer cells.

PURPOSE: Randomized phase III trial to compare the effectiveness of combination chemotherapy followed by bone marrow or peripheral stem cell transplantation in treating patients with acute myelogenous leukemia.

OBJECTIVES: I. Determine the complete remission (CR) rate following 1 or 2 courses of ICE (idarubicin/cytarabine/etoposide) vs. MICE (mitoxantrone/cytarabine/etoposide) vs. DCE (daunorubicin/cytarabine/etoposide) in patients with newly diagnosed acute myeloid leukemia. II. Compare disease-free survival and overall survival achieved with each anthracycline on the above induction regimens and with intermediate-dose cytarabine (IDIA vs. NOVIA vs. DIA) as consolidation therapy. III. Compare disease-free survival, relapse rate, death in first CR, and overall survival in patients who receive peripheral blood stem cells (PBSC) vs. autologous bone marrow transplant (AuBMT) vs. allogeneic bone marrow transplant (AlBMT) as rescue from myeloablative therapy following remission consolidation. IV. Assess the time to recovery of normal or acceptable polymorphonuclear leukocyte and platelet counts following each treatment step. V. Determine the incidence and type of grade 4 toxicity and treatment-related mortality. VI. Evaluate the quality of life during each step of treatment using self-administered questionnaires. VII. Compare stem cell mobilization after IDIA vs. NOVIA vs. DIA, each using granulocyte colony-stimulating factor as the mobilizing growth factor. VIII. Assess the rate of completion of stem cell transplantation using PBSC vs. AlBMT vs. AuBMT as the last step of therapy. IX. Compare the costs of treatment (e.g., antibiotics and transfusion requirements) and hospitalization duration between the AuBMT vs. PBSC.

OUTLINE: Randomized study. All patients are randomized to Arms I, II, and III for Induction/Consolidation. Patients in CR following Consolidation who have an HLA-identical sibling, are less than 45 or 55 years of age (depending on center policy), and have adequate organ function are nonrandomly assigned to AlBMT on Regimen A; those in CR who are without an available sibling donor and who have adequate organ function proceed to Regimen B, then are randomized to Arms IV and V. The following acronyms are used: AlBMT Allogeneic Bone Marrow Transplant ARA-C Cytarabine, NSC-63878 AuBMT Autologous Bone Marrow Transplant BU Busulfan, NSC-750 CTX Cyclophosphamide, NSC-26271 DCE DNR/ARA-C/VP-16 DHAD Mitoxantrone, NSC-301739 DIA DNR/ID ARA-C DNR Daunorubicin, NSC-82151 G-CSF Granulocyte Colony-Stimulating Factor (Rhone-Poulenc-Rorer) ICE IDA/ARA-C/VP-16 IDA Idarubicin, NSC-256439 ID Intermediate Dose IDIA IDA/ID ARA-C Mesna Mercaptoethane sulfonate, NSC-113891 MICE DHAD/ARA-C/VP-16 NOVIA DHAD/ID ARA-C PBSC Peripheral Blood Stem Cells TBI Total-Body Irradiation VP-16 Etoposide, NSC-141540 INDUCTION/CONSOLIDATION: Arm I: 3-Drug Combination Chemotherapy followed by 2-Drug Combination Chemotherapy. ICE; followed by IDIA. Arm II: 3-Drug Combination Chemotherapy followed by 2-Drug Combination Chemotherapy. MICE; followed by NOVIA. Arm III: 3-Drug Combination Chemotherapy followed by 2-Drug Combination Chemotherapy. DCE; followed by DIA. POSTCONSOLIDATION THERAPY: Regimen A: Single-Agent Chemoablation plus Radioablation or 2-Drug Chemoablation followed by Hematopoietic Rescue. CTX; plus TBI (equipment unspecified); or CTX/BU; followed by AlBMT. Entry on EORTC study comparing CI IDA with standard CTX/TBI or CTX/BU encouraged. Regimen B: Stem cell Mobilization and Harvest. G-CSF or CTX/G-CSF. Arm IV: Single-Agent Chemoablation plus Radioablation or 2-Drug Chemoablation followed by Hematopoietic Rescue. CTX/TBI or CTX/BU; followed by PBSC. Arm V: Single-Agent Chemoablation plus Radioablation or 2-Drug Chemoablation followed by Hematopoietic Rescue. CTX/TBI or CTX/BU; followed by AuBMT.

PROJECTED ACCRUAL: 1,520 patients will be randomized for Induction/Consolidation over about 5 years; if excessive deaths are found at interim analyses, the inferior arm will close. It is expected that 744 patients will be randomized for Postconsolidation therapy, with 345 patients followed until relapse/death.

DISEASE CHARACTERISTICS: Newly diagnosed acute myeloid leukemia (AML) of any FAB histology (M1-M7) except M3 At least 30% blast cells in bone marrow smears Secondary leukemias eligible, as follows: Following cured malignancies, including Hodgkin's disease Following exposure to alkylating agents or radiotherapy for other reasons The following leukemias are excluded: Blast crisis of chronic myeloid leukemia Leukemia secondary to other myeloproliferative disease Leukemia secondary to myelodysplastic syndrome of more than 6 months' duration No other progressive malignant disease

PATIENT CHARACTERISTICS: Age: 15 to 60 Performance status: Not specified Hematopoietic: Not applicable Hepatic: Bilirubin no greater than 1.5 x ULN Renal: Creatinine no greater than 1.5 x ULN Cardiovascular: No severe heart failure requiring diuretics or with an LVEF less than 50% Other: No severe concomitant neurologic disease No severe concomitant psychologic disease

PRIOR CONCURRENT THERAPY: No prior therapy for AML (chemotherapy, radiotherapy, or more than 7 days of corticosteroids)