OUTLINE: Patients receive idarubicin IV and cytarabine IV over 2 hours on days 1-3. When blood counts recover, Philadelphia chromosome negative peripheral blood stem cells (PBSC) are harvested. Filgrastim (G-CSF) is administered subcutaneously (SC) beginning 24 hours after completion of cytarabine infusion and continuing until blood counts have recovered for 3 consecutive days after harvest of PBSC. Patients with more than 5% blasts in marrow or any peripheral blasts, interferon resistance, interferon intolerance with poor prognosis, and clonal evolution proceed to conditioning followed by PBSC transplantation. Patients receive conditioning comprising oral busulfan every 6 hrs on days -8 to -5 and cyclophosphamide IV over 2 hours on days -4 and -3. PBSC are reinfused on day 0. Patients receive graft versus leukemia induction comprising cyclosporine IV over 4 hours every 12 hours on days 0-28 and interferon gamma SC beginning on day 7 and continuing every other day through day 28. Patients are followed every 3 months for 1 year and then annually for 5 years.