RATIONALE: Drugs used in chemotherapy use different ways to stop tumor cells from dividing so they stop growing or die.

PURPOSE: Phase II trial to compare the effectiveness of octreotide alone or with prednisone in treating patients with metastatic or recurrent thymoma.

OBJECTIVES: I. Determine the objective response rate in patients with metastatic or recurrent thymoma treated with octreotide. II. Determine the duration of remission in these patients. III. Determine the toxicity of the octreotide regimen in this population. IV. Determine the response rate, duration of remission, survival and toxicity of prednisone added to octreotide in patients with stable disease following octreotide alone.

OUTLINE: All patients receive octreotide subcutaneously three times daily for 1 month. After two courses of treatment, patients are assessed for response. Patients experiencing partial or complete response continue octreotide for a maximum of 1 year (12 courses) in the absence of unacceptable toxicity or disease progression. Patients with stable disease after 2 courses of octreotide receive daily oral prednisone in addition to octreotide for an additional 2 courses. These patients are then reevaluated and continue on octreotide plus prednisone for a maximum of 1 year in the absence of unacceptable toxicity or disease progression. Patients are followed every 3 months for 1 year, every 4 months for the second year, every 6 months for the next 3 years, and then annually thereafter.

PROJECTED ACCRUAL: There will be 38 patients accrued into this study over approximately 2 years.

DISEASE CHARACTERISTICS: Histologically confirmed invasive, recurrent, or metastatic thymoma or thymic carcinoma not amenable to potentially curative therapy Must have extensive disease defined as: - distant disease - pleural disease with or without mediastinal involvement - recurrent progressive disease in site of previous radiotherapy Measurable disease with at least one bidimensionally measurable lesion Must have octreotide scan prestudy that demonstrates activity in the area of measurable disease within 6 months prior to registration

PATIENT CHARACTERISTICS: Age: 18 and over Performance status: ECOG 0-1 Life expectancy: Not specified Hematopoietic: Not specified Hepatic: Bilirubin no greater than 2.0 mg/dL Renal: Creatinine no greater than 3.0 mg/dL Other: No diabetes mellitus or any other complications to high dose corticosteroid therapy No acute concurrent complications such as infections Other prior malignancy(ies) must have been curatively treated and demonstrate no evidence of recurrence Not pregnant or nursing Negative pregnancy test Adequate contraception required of all fertile patients

PRIOR CONCURRENT THERAPY: Biologic therapy: Not specified Chemotherapy: Prior chemotherapy allowed if disease progression is demonstrated prior to study entry Endocrine therapy: Prior or concurrent corticosteroids for myasthenia gravis allowed Radiotherapy: Prior radiotherapy allowed Surgery: No postsurgical complications