RATIONALE: Drugs used in chemotherapy use different ways to stop cancer cells from dividing so they stop growing or die. Some cancers may become resistant to chemotherapy drugs. Combining PSC 833 with chemotherapy may reduce resistance to the drugs and allow the cancer cells to be killed. Interleukin-2 may stimulate a person's white blood cells to kill leukemia cells.

PURPOSE: Phase I/II trial to study the effectiveness of combination chemotherapy plus PSC 833 followed by additional chemotherapy or peripheral stem cell transplantation and interleukin-2 in treating patients with untreated acute myelogenous leukemia.

OBJECTIVES: I. Determine the maximum tolerated dose (MTD) of daunorubicin when used in combination with etoposide, cytarabine, and PSC 833 (ADEP), and in combination with etoposide and cytarabine (ADE) in previously untreated patients with acute myelogenous leukemia who are less than 60 years. II. Determine the MTD of etoposide when used in combination with a constant dose of daunorubicin and cytarabine (ADE) in these patients. III. Determine the feasibility and toxic effects of administering postremission therapy in a risk adapted fashion, such that patients with favorable cytogenetic findings receive three intensifications with high dose cytarabine (HiDAC), while average to poor risk patients receive HiDAC/etoposide/filgrastim (G-CSF) for consolidation therapy and stem cell mobilization followed by peripheral stem cell (PBSC) transplant using busulfan/etoposide as the preparative regimen. IV. Determine the feasibility and toxic effects of the consolidation sequence of HiDAC/etoposide/G-CSF followed by 2 courses of HiDAC in patients who would otherwise receive PBSC transplant, but are unable to do so for logistical or institutional reasons. V. Determine the feasibility of intermittent administration of high dose subcutaneous interleukin-2 (IL-2) in combination with continuous low dose subcutaneous IL-2 in patients recovering from PBSC transplant or intensive consolidation chemotherapy.

OUTLINE: This is a dose escalation study of daunorubicin in the induction therapy portion, with a separate dose escalation study of etoposide in the same portion. Patients are treated with three phases of treatment: induction, intensification, and postremission therapy. Induction therapy: Patients receive cytarabine IV as a continuous infusion on days 1-7 plus daunorubicin IV over 30 minutes and etoposide IV over 2 hours on days 1-3 (ADE regimen). Some patients also receive PSC 833 IV as a continuous infusion on days 1-3 (ADEP regimen). This course may be repeated 14 days later. Cohorts of 9 patients each receive escalating doses of daunorubicin until the maximum tolerated dose (MTD) is reached. The MTD is defined as the dose at which 3 of 9 patients experience dose limiting toxicity. Escalations are conducted separately for the ADE and ADEP regimens. Other cohorts of 9 patients each receive escalating doses of etoposide with constant doses of daunorubicin in the ADE regimen. The MTD is described in the same manner. Intensification therapy: Arm I (patients with certain genetic characteristics in their leukemia cells): Patients receive 3 additional courses of cytarabine IV over 3 hours, twice a day, for 3 days. Courses are repeated every 28 days. Arm II (patients who do not have these genetic characteristics): Patients undergo a peripheral blood stem cell (PBSC) transplant. Patients first receive high dose cytarabine IV over 2 hours on days 1-4, etoposide IV as a continuous infusion on days 1-4, and filgrastim (G-CSF) subcutaneously beginning on day 5 until blood counts recover. PBSC are then collected. Approximately 4-6 weeks later, patients receive oral busulfan 4 times a day on days 1-4 and etoposide IV over 4 hours on day 5. PBSC are reinfused on day 7. G-CSF is administered subcutaneously beginning on day 7 until blood cell counts recover. Arm III (patients who cannot undergo a PBSC transplant): Patients receive cytarabine, etoposide, and G-CSF as in arm II, then high dose cytarabine as in arm I. Postremission therapy (all patients): Patients receive low dose interleukin-2 (IL-2) by daily injection for 2 weeks. On day 15, patients begin receiving intermittent high dose IL-2 three days a week. Patients alternate these courses of IL-2: 14 days of low dose IL-2, 3 days of high dose IL-2, 1 day of rest, low dose IL-2 for 10 days, then 3 days of high dose IL-2, then 1 day of rest. This course is repeated 3 times. Patients then receive another 16 day course of low dose IL-2. Patients are followed at 1 month, then every 3 months for 2 years, then every 6 months for 2 years, then annually thereafter.

PROJECTED ACCRUAL: Approximately 410 patients will be accrued into this study within 36 months.

DISEASE CHARACTERISTICS: Histologically proven acute myelogenous leukemia, except M3

PATIENT CHARACTERISTICS: Age: 15 to 59 Performance status: Not specified Life expectancy: Not specified Hematopoietic: No prior hematologic malignancy, myeloproliferative disorder, myelodysplastic syndrome, or paroxysmalnocturnal hemoglobinuria No unexplained cytopenias greater than 3 months in duration Hepatic: Not specified Renal: Not specified

PRIOR CONCURRENT THERAPY: Biologic therapy: No prior biologic therapy No prior treatment for leukemia except leukapheresis Chemotherapy: No prior chemotherapy except hydroxyurea which may be used for emergency therapy of hyperleukocytosis Endocrine therapy: Not specified Radiotherapy: Prior cranial radiation therapy allowed for CNS leukostasis Surgery: Not specified