The goal of this clinical research study is to study how effective treatments with clofarabine alone and clofarabine given in combination with ara-C are in the treatment of leukemia and high-risk myelodysplastic syndrome (MDS) in patients who are 60 years or older. The safety of these treatments will also be compared.

Clofarabine is a chemotherapy drug that is designed to interfere with the growth and development of cancer cells. Ara-C is a chemotherapy drug which is approved for the treatment of AML and MDS. Although there is experience with the combination of both drugs, there have not been trials that explored the particular doses and schedule of clofarabine plus ara-C that you may receive.

Before you can start treatment on the study, you will have what are called "screening tests". These tests will help the doctor decide if you are eligible to take part in the study. You will have a complete medical history and physical exam. You will also be asked about what medications you are taking currently and about the level of your daily activities. About 2 tablespoons of blood will be collected for routine blood tests and to make sure you are not at increased risk for developing side effects.

Before your first treatment (usually within 14 days), you may have bone marrow samples collected. To collect a bone marrow sample, an area of the hip or chest bone is numbed with anesthetic and a small amount of bone marrow is withdrawn through a large needle. The procedure will be explained to you by your doctor and will require you to sign a separate consent document.

Early study results showed that there is clearly a better response with the combination treatment compared to the clofarabine alone treatment. Because of this, all participants in this study will now be assigned to the clofarabine plus ara-C group. You will receive clofarabine through a vein daily for 5 days in a row. In addition, you will receive injections of ara-C under the skin once a day for 14 days in a row. On those days when both clofarabine and ara-C are taken, the clofarabine will be given approximately 4 hours before the ara-C injections. You can be taught to give the ara-C injections to yourself. Each cycle may be repeated every 3 to 6 weeks. You will be required to record the injections in a medication diary.

Up to 2 of these cycles (for both groups) can be given at this dose schedule. If you show a response to treatment, you can continue with up to 12 cycles of therapy, during which clofarabine will be given for 3 days instead of 5 and ara-C for 7 days instead of 14. Maintenance courses may be given on average every 4 to 7 weeks.

Before every treatment course, you will have a physical exam including measurement of your weight and vital signs. You will also be asked how you are feeling and how you are able to go about your daily routine. At least once a week (more often if your doctor feels it is necessary), you will have blood samples (about 1-2 teaspoons) collected for routine lab tests. Around 3 weeks after your first treatment, you may have samples of bone marrow collected. After that, the bone marrow collections will be performed every 2 weeks (or more often if your doctor feels it is necessary). The bone marrow sample will be tested to evaluate the response of the disease to therapy.

You will need to stay in Houston for the first 4 weeks of treatment. After that, you have to return to Houston to receive the clofarabine treatment, but you can have check-up visits and blood tests with your local doctor. If the disease gets worse or you experience any intolerable side effects, you will be taken off the study and your doctor will discuss other treatment options with you.

After you finished your treatment, and as long you are participating on this study you will be scheduled every 3-6 months to check on the status of the disease and your overall health as long as you stay on the study. Once you are taken off the study, your doctor will decide how often you will have follow-up as part of your standard care.

This is an investigational study. Clofarabine is authorized by the Food and Drug Administration (FDA) for use in research only. Up to 108 participants will take part in this study. All will be enrolled at M. D. Anderson.

Inclusion Criteria:

• Previously untreated AML and high-risk MDS ( > 10% blasts, or International Prognostic Scoring System (IPSS) intermediate-2). Prior therapy with hydroxyurea, single agent chemotherapy (e.g. decitabine), hematopoietic growth factors, biological or "targeted" therapies are allowed.
• Age > 60 years.
• Eastern Cooperative Oncology Group (ECOG) performance status </= 2.
• Sign a written informed consent form.
• Adequate liver function (total bilirubin < 2mg/dL,serum glutamic pyruvic transaminase (SGPT) or Serum glutamic oxaloacetic transaminase (SGOT) < x 4 upper limit of normal (ULN)) and renal function (serum creatinine < 2mg/dL).

Exclusion Criteria:

• Patients with >= New York Heart Association (NYHA) grade 3 heart disease as assessed by history and/or physical examination.