OUTLINE: All patients receive induction chemotherapy over 5 weeks with: etoposide, ifosfamide/mesna, dexamethasone, vincristine, and pegaspargase (if pegaspargase is not available, E. coli asparaginase may be substituted throughout study); then dexamethasone, vincristine, pegaspargase (or E. coli asparaginase), and high-dose methotrexate with leucovorin rescue; and triple intrathecal chemotherapy (TIT). Following induction chemotherapy, all patients receive two 6-week courses of intensification therapy with intermittent TIT; each course consists of dexamethasone, vincristine, high-dose methotrexate/leucovorin, thioguanine, cytarabine, etoposide, and pegaspargase (or E. coli asparaginase) followed by dexamethasone, vincristine, high-dose methotrexate/leucovorin, thioguanine, ifosfamide/mesna, and idarubicin. Patients receive 2 additional courses of intensification chemotherapy followed by four 12-week courses of maintenance chemotherapy with vincristine and methotrexate every 2 weeks and daily oral thioguanine. Total duration of therapy is 78 weeks. Patients with isolated ocular relapse receive local radiotherapy prior to initiation of induction chemotherapy; those who also have CNS leukemia begin TIT with the radiotherapy. Patients with CNS relapse receive craniospinal irradiation during the first month of maintenance therapy, with the dose and fields based on whether they will receive TBI and whether they have had CNS irradiation previously. Patients with testicular relapse receive bilateral testicular irradiation during the first 3 weeks of intensification therapy. Patients are followed every 3 months for 3 years, every 6 months for 3 years, and yearly thereafter, or upon relapse, second malignancy, loss to follow up, or death. All patients undergo quality-of-life assessment at entry and 2 and 4 years after entry.