RATIONALE: Radiation therapy uses high-energy x-rays to damage cancer cells. Drugs used in chemotherapy use different ways to stop cancer cells from dividing so they stop growing or die. Interferon alfa may interfere with the growth of cancer cells.

PURPOSE: Phase II trial to study the effectiveness of total-body irradiation, busulfan, and interferon alfa followed by peripheral stem cell or bone marrow transplantation in treating patients with multiple myeloma.

OBJECTIVES: I. Evaluate the effects of total marrow irradiation and busulfan followed by allogeneic peripheral blood stem cell or marrow transplantation on the outcomes of treatment related mortality, response, relapse, survival, and event free survival for patients with advanced multiple myeloma.

OUTLINE: Peripheral blood stem cell (PBSC) or bone marrow (BM) collection and infusion are performed according to standard practice. Patients undergo total marrow irradiation (TMI) bid for 3 days. Busulfan is administered every 6 hours on days -6 to -3. PBSC or BM is infused on day 0. Interferon alfa is administered subcutaneously on Mondays, Wednesdays, and Fridays beginning on day 80. Interferon therapy may continue in the absence of graft versus host disease or disease progression. Patients are followed on days 56 and 84, then every 6 months for 2 years, and annually thereafter.

PROJECTED ACCRUAL: A maximum of 30 patients will be accrued over 3 years.

DISEASE CHARACTERISTICS: Histologically diagnosed stage II or III multiple myeloma Stage I multiple myeloma progressing on conventional therapy HLA matched donor Related - ages 18-65 Unrelated - ages 18-55

PATIENT CHARACTERISTICS: Age: 18 to 65 Performance status: Karnofsky 70-100% Life expectancy: Not specified Hematopoietic: Not specified Hepatic: No significant hepatic disease Bilirubin no greater than 2 mg/dL Renal: Creatinine clearance at least 40 mL/min Calcium no greater than 15 mg/dL Cardiovascular: No significant cardiac disease Ejection fraction at least 40% Pulmonary: No significant pulmonary disease FEV1 at least 50% OR DLCO at least 50% Other: No obesity Chest wall no greater than 3 cm thick No pendulous breasts HIV negative

PRIOR CONCURRENT THERAPY: Must have received prior conventional therapy for stage I disease