OBJECTIVES: I. Determine the toxicity associated with cyclophosphamide and rituximab (IDEC-C2B8 monoclonal antibody) as first line treatment in patients with stage III or IV indolent B-cell lymphoma. II. Determine the objective tumor response rate and duration of response associated with this first line treatment in these patients. III. Determine the failure-free and overall survival for these patients. IV. Compare the response rate and survival rates for patients with indolent lymphoma who were treated with this treatment as the first systemic therapy for their disease with response rates and survival observed for similar patients treated in published trials. V. Determine the quality of life associated with this treatment in this patient population.