RATIONALE: Chemoprevention therapy is the use of certain drugs to try to prevent the development of or treat early cancer. Fenretinide may be an effective drug in treating leukoplakia.

PURPOSE: Randomized phase II trial to study the effectiveness of fenretinide in treating patients who have leukoplakia of the mouth.

OBJECTIVES: I. Determine modulation by fenretinide of surrogate endpoint markers of oral mucosal carcinogenesis in patients with oral dysplastic leukoplakia. II. Determine whether fenretinide will cause significant modulation of intermediate endpoint markers and significant regression of oral dysplastic leukoplakia in this patient population. III. Compare the ability of fenretinide and placebo to modulate surrogate endpoint biomarkers in this patient population. IV. Document the degree of recurrence of oral dysplastic leukoplakia after the administration of fenretinide, both at the same site and at new sites.

OUTLINE: This is a randomized, double blind, placebo controlled study. Patients are randomized to 1 of 2 treatment arms: Arm I: Patients receive oral fenretinide daily (except days 1-3 each month) for 6 months. Arm II: Patients receive oral placebo daily (except days 1-3 each month) for 6 months. Patients then receive oral fenretinide daily (except days 1-3 each month) for 6 months. Patients are followed every 3 months.

PROJECTED ACCRUAL: A total of 30 patients will be accrued for this study.

DISEASE CHARACTERISTICS: Histologically proven dysplastic leukoplakia greater than 1 cm in diameter

PATIENT CHARACTERISTICS: Age: 18 and over Performance status: ECOG 0-2 Life expectancy: Not specified Hematopoietic: WBC at least 3,500/mm3 Platelet count at least 125,000/mm3 Hemoglobin at least 12.0 g/dL Hepatic: Bilirubin less than 1.5 mg/dL SGOT less than 2 times upper limit of normal (ULN) Renal: Creatinine less than 1.7 mg/dL Cardiovascular: No symptomatic coronary artery disease No uncontrolled hypertension No prior coronary artery bypass No acute myocardial infarction in the past year Other: Not pregnant or nursing Negative pregnancy test Fertile patients must use effective barrier contraception for 1 month prior, during, and for 12 months after study Fasting serum triglyceride less than 2 times ULN Cholesterol less than 350 mg/dL No hypersensitivity to vitamin A or retinoids No active malignancy No concurrent acute or chronic medical or psychiatric condition that would preclude compliance or toxicity assessment No concurrent and severe night blindness

PRIOR CONCURRENT THERAPY: Biologic therapy: Not specified Chemotherapy: Not specified Endocrine therapy: Not specified Radiotherapy: Not specified Surgery: Not specified Other: At least 3 months since prior chronic high dose (greater than 30,000 IU/day) vitamin A (retinol) At least 1 month since other prior retinoids