RATIONALE: Peripheral stem cell transplantation may be able to replace immune cells that were destroyed by chemotherapy or radiation therapy used to kill tumor cells.

PURPOSE: Phase II trial to study the effectiveness of peripheral stem cell transplantation from related donors to prevent graft-versus-host disease in treating patients with hematologic cancer.

OBJECTIVES: I. Evaluate the use of donor peripheral blood stem cells without graft-versus-host disease prophylaxis to maximize the probability of graft-versus-tumor effect in patients with hematologic malignancies refractory to standard chemotherapy and unlikely to be cured with high dose chemotherapy and radiotherapy.

OUTLINE: Prior to peripheral blood stem cell transplant, patients undergo preparative cytoreduction. Patients receive total body irradiation (TBI) beginning on day -5. Radiotherapy is administered in 9 doses over 3 days (3 doses per day for 3 days). Male patients with acute lymphocytic leukemia receive an additional dose of radiation to the testicles. Patients who are ineligible for TBI due to prior radiotherapy receive 2 doses of melphalan IV on day -3. All patients receive cyclophosphamide IV over 1 hour on days -2 and -1. Anti-thymocyte globulin is also administered IV over 6 hours on days -2 and -1. Approximately 24-36 hours after the last dose of cyclophosphamide, peripheral blood stem cells obtained from the HLA matched related donor are infused into the patient. Patients do not receive graft-versus-host disease prophylaxis after transplant; however, all other forms of supportive care are provided. Patients are followed for 1 year.

PROJECTED ACCRUAL: A maximum of 42 patients will be accrued for this study.

DISEASE CHARACTERISTICS: Patients with HLA identical family donors and any one of the following conditions documented by marrow aspiration and biopsy: -Acute leukemia refractory to induction treatment or after 1 or more relapses -Acute myeloid leukemia with t(9;22), -5/5q-, -7/7q-, and 11q23 involvement in first remission (not M4 or M5) -Acute lymphocytic leukemia with t(9;22) or t(4;11) in first remission -Myelodysplastic syndrome with greater than 5% bone marrow blasts -Chronic myeloid leukemia in accelerated phase or nonlymphoid blast crisis -Myeloma, chronic lymphocytic leukemia, non-Hodgkin's lymphoma, or Hodgkin's disease refractory to 2 lines of standard treatment or progression on standard treatment No evidence of active extramedullary disease

PATIENT CHARACTERISTICS: Age: Any age Performance status: Karnofsky 70-100% Life expectancy: Greater than 8 weeks Hematopoietic: Not specified Hepatic: Bilirubin less than 2.0 mg/dL SGOT no greater than 4 times upper limit of normal and not increasing for 2-4 weeks prior to transplant Renal: Creatinine less than 2 times normal and not increasing for 2-4 weeks prior to transplant OR Creatinine clearance greater than 60 mL/min Cardiovascular: LVEF greater than 50% by MUGA Pulmonary: DLCO greater than 50% Other: Not HIV positive Not pregnant or nursing Fertile patients must use effective contraceptive

PRIOR CONCURRENT THERAPY: See Disease Characteristics