RATIONALE: Drugs used in chemotherapy use different ways to stop cancer cells from dividing so they stop growing or die. Combining more than one drug may kill more cancer cells. Bone marrow transplantation may allow the doctor to give higher doses of chemotherapy and kill more cancer cells. Radiation therapy uses high-energy x-rays to damage cancer cells.

PURPOSE: Phase II trial to study the effectiveness of combination chemotherapy, bone marrow transplantation, and radiation therapy in treating infants with acute lymphoblastic leukemia.

OBJECTIVES: I. Assess the feasibility and outcome of intensified induction/consolidation followed by intensified re-induction/re-intensification in infants less than 1 year of age with newly diagnosed acute lymphocytic leukemia (ALL). II. Evaluate the feasibility and outcome of bone marrow transplantation using family or unrelated donors in infants with the 11q23 abnormality. III. Evaluate neuropsychologic outcome upon completion of protocol therapy in patients who have reached the ages of 3 and 7 years, with special attention to the outcome in infants who received total-body irradiation. IV. Study the biology of infant ALL in samples of leukemic blood and bone marrow. V. Study the possible associations among patient- and disease-specific factors and family sociodemographic characteristics that mediate treatment outcome.

OUTLINE: Upon completion of Induction/Intensification and Re-Induction therapy, patients with the 11q23 abnormality and with a matched or one-antigen mismatched related or unrelated donor proceed immediately to Transplantation; all others proceed to Re-Intensification, Consolidation, Intensified Maintenance, and Routine Maintenance. The following acronyms are used: AlBM Allogeneic Bone Marrow ARA-C Cytarabine, NSC-63878 ASP Asparaginase, NSC-109229 CF Leucovorin calcium, NSC-3590 CTX Cyclophosphamide, NSC-26271 CYSP Cyclosporine, NSC-290193 DM Dexamethasone, NSC-34521 DNR Daunorubicin, NSC-82151 G-CSF Granulocyte-Colony Stimulating Factor (Amgen), NSC-614629 HC Hydrocortisone, NSC-10483 MePRDL Methylprednisolone, NSC-19987 Mesna Mercaptoethane sulfonate, NSC-113891 MP Mercaptopurine, NSC-755 MTX Methotrexate, NSC-740 PEG-ASP Pegaspargase, NSC-644954 PRED Prednisone, NSC-10023 TBI Total-Body Irradiation TIT Triple Intrathecal Therapy (IT ARA-C/IT HC/IT MTX) VCR Vincristine, NSC-67574 VH Very High Dose VP-16 Etoposide, NSC-141540 INDUCTION/INTENSIFICATION: 5-Drug Combination Systemic Chemotherapy followed by 3-Drug Combination Systemic Chemotherapy plus 3-Drug Combination Intrathecal Chemotherapy. DM/VCR/DNR/CTX/Mesna/ASP; followed by MTX/CF/VP-16/CTX/Mesna; plus TIT. RE-INDUCTION: 5-Drug Combination Systemic Chemotherapy plus 3-Drug Combination Intrathecal Chemotherapy. DNR/VCR/CTX/Mesna/ASP/DM; plus TIT. RE-INTENSIFICATION: 2-Drug Combination Systemic Chemotherapy plus Single-Agent Intrathecal Chemotherapy followed by 2-Drug Combination Systemic Chemotherapy. VCR/VH MTX/CF; plus IT ARA-C; followed by VP-16/CTX/Mesna. CONSOLIDATION: 2-Drug Combination Systemic Chemotherapy followed by 2-Drug Combination Systemic Chemotherapy plus Single-Agent Intrathecal Chemotherapy. ARA-C/ASP; followed by VH MTX/CF/VCR; plus IT ARA-C. INTENSIFIED MAINTENANCE: 4-Drug Combination Systemic Chemotherapy plus Single-Agent Intrathecal Chemotherapy followed by 2-Drug Combination Systemic Chemotherapy. DM/VCR/MTX/MP; plus IT ARA-C followed by VP-16/CTX/Mesna. ROUTINE MAINTENANCE: 4-Drug Combination Systemic Chemotherapy plus Single-Agent Intrathecal Chemotherapy. VCR/MTX/MP/PRED; plus IT MTX. TRANSPLANTATION: 2-Drug Combination Myeloablative Chemotherapy followed by Radiotherapy followed by Hematopoietic Rescue plus GVHD Prophylaxis. ARA-C/CTX; followed by TBI using a linear accelerator or Co60 equipment; followed by AlBM; plus MePRDL; CYSP.

PROJECTED ACCRUAL: 100 patients per year will be entered over approximately 3 years.

DISEASE CHARACTERISTICS: Histologically confirmed acute lymphoblastic leukemia (ALL) in infants under 12 months of age at diagnosis Adequate bone marrow and/or peripheral blood specimens with blasts available No prior treatment for ALL except emergency therapy for the following: Blast cell crisis Superior vena cava syndrome Renal failure due to leukemic infiltration of the kidneys

PATIENT CHARACTERISTICS: See General Eligibility Criteria