RATIONALE: Peripheral stem cell transplantation may be an effective treatment for leukemia, myelodysplastic syndrome, or chronic myelogenous leukemia that has relapsed following bone marrow transplantation.

PURPOSE: Phase I/II trial to study the effectiveness of decitabine and peripheral stem cell transplantation in treating patients who have leukemia, myelodysplastic syndrome, or chronic myelogenous leukemia that has relapsed after bone marrow transplantation.

OBJECTIVES: I. Determine the maximum tolerated dose of decitabine in patients with relapse post allogenic bone marrow transplant. II. Determine the toxicity of decitabine combined with filgrastim (G-CSF) primed allogeneic peripheral blood stem cells in patients who relapsed within 1 year after allogeneic bone marrow transplantation. III. Determine the effectiveness in reinducing remission in these patients.

OUTLINE: Patients receive decitabine IV for 6 hours every 12 hr for 5 days. Peripheral blood stem cells (PBSC) are administered 5 days after last dose of decitabine. Donors receive filgrastim subcutaneously (SQ) daily every 12 hours starting 2-4 days prior to first PBSC collection. If insufficient number of cells are collected, bone marrow can be harvested for supplementation. Donor cells should be collected prior to decitabine infusion. Patients receive filgrastim SQ administered daily starting 1 day after PBSC infusion until blood counts recover. For GVHD prophylaxis, patients receive cyclosporine IV daily on day -2, then orally once dose is tolerable. Dose of decitabine is escalated in cohorts of 3-6 patients. If dose limiting toxicity occurs in 2 of 6 patients at a given dose level, then that dose is declared the maximum tolerated dose. Patients are followed weekly. If none of the first 5 patients survive in remission for more than 100 days, the study will be terminated.

PROJECTED ACCRUAL: At least 15 patients will be accrued for this study over 2 years.

DISEASE CHARACTERISTICS: Acute leukemia, myelodysplastic syndromes or chronic myelogenous leukemia (CML) in accelerated phase or blast crisis and relapsed within 1 year after allogeneic bone marrow transplantation Must not be candidates for second course of high dose chemoradiotherapy

PATIENT CHARACTERISTICS: Age: 60 and under Performance status: Zubrod 0-2 Life expectancy: Not specified Hematopoietic: Not specified Hepatic: Bilirubin less than 3 mg/dL Renal: Creatinine less than 2 mg/dL Cardiovascular: Greater than 40% ejection fraction per MUGA scan or ECHO Other: Not pregnant No serious intercurrent illness No active CNS disease Must be ineligible for protocols of higher priority No active acute graft vs host disease (GVHD) greater than grade 2 or extensive chronic GVHD No active uncontrolled infection Original marrow donor must undergo filgrastim primed peripheral blood stem cell collection

PRIOR CONCURRENT THERAPY: See Disease Characteristics