RATIONALE: Drugs used in chemotherapy work in different ways to stop the growth of cancer cells, either by killing the cells or by stopping them from dividing. Giving more than one drug (combination chemotherapy), and giving the drugs in different combinations may kill more cancer cells. PURPOSE: This phase II trial is studying how well combination chemotherapy works in treating patients with newly diagnosed acute lymphoblastic leukemia.

OBJECTIVES: Primary * Determine the probability of 1-year continuous complete remission in patients with newly diagnosed acute lymphoblastic leukemia treated with first induction chemotherapy comprising daunorubicin, vincristine, prednisone, and pegaspargase; and second induction chemotherapy comprising high-dose cytarabine and mitoxantrone. Secondary * Determine the frequency and severity of toxic effects of these induction regimens followed by consolidation therapy comprising cyclophosphamide, cytarabine, mercaptopurine, and methotrexate and maintenance chemotherapy comprising mercaptopurine, methotrexate, vincristine, doxorubicin, dexamethasone, cyclophosphamide, thioguanine, and cytarabine in these patients. Other objectives (if funding allows): * To evaluate in a preliminary manner the significance of detecting minimal residual disease as a prognostic factor for survival and relapse-free survival of patients receiving chemotherapy * To evaluate in a preliminary manner the pattern of gene expression of patients entered onto the trial and its relationship to cytogenetics/FISH risk classification, overall survival, and relapse-free survival OUTLINE: This is a multicenter study. * First induction chemotherapy: Patients receive daunorubicin IV on days 1-3; vincristine IV on days 1, 8, 15, and 22; prednisone IV or orally on days 1-28, followed by a taper to day 35; and pegaspargase IV or subcutaneously (SC) on day 15. Patients with CNS leukemia also receive methotrexate intrathecally (IT) or intraventricularly twice weekly and oral leucovorin calcium four times daily for 4 doses after each administration of methotrexate. When blasts are no longer present in the spinal fluid, patients receive methotrexate IT or intraventricularly once weekly for 4 weeks and then once monthly for 1 year. Patients are reevaluated on day 28. Patients who achieve A1 bone marrow status and B1 peripheral blood status or those with resistant disease proceed to second induction therapy. * Second induction chemotherapy: Patients receive high-dose cytarabine IV on days 1-5; mitoxantrone IV on day 3; and filgrastim (G-CSF) SC or IV beginning on day 7 and continuing until blood counts recover. Patients with CNS leukemia also receive methotrexate and leucovorin calcium as in first induction chemotherapy. Patients are reevaluated on day 28. Patients who achieve A1 bone marrow status and B1 peripheral blood status with no extramedullary disease (other than CNS involvement) proceed to consolidation chemotherapy. Patients with resistant disease OR Philadelphia chromosome- or BCR/ABL-positive disease are removed from the study after receiving double induction chemotherapy. * Consolidation chemotherapy: Patients receive cyclophosphamide IV on days 1, 15, and 29; cytarabine IV on days 2-5 and 16-19; oral mercaptopurine on days 1-28; and methotrexate IT or intraventricularly on days 2, 9, 16, and 23. Patients with CNS leukemia also undergo cranial radiotherapy once daily, 5 days a week, for 2 weeks. Patients in complete remission proceed to maintenance chemotherapy. * Maintenance chemotherapy: * Course 1: Patients receive oral mercaptopurine on days 1-63 and oral methotrexate on days 1, 8, 15, 22, 29, 36, 43, 50, and 57. Patients proceed to course 2 after blood counts recover. * Course 2: Patients receive vincristine IV and doxorubicin IV on days 1, 8, 15, and 22 and oral dexamethasone on days 1-28. Patients proceed to course 3 after blood counts recover. * Course 3: Patients receive cyclophosphamide IV on day 1; oral thioguanine on days 1-14; and cytarabine IV on days 3-6 and 10-13. Patients proceed to course 4 after blood counts recover. * Course 4: Patients receive oral mercaptopurine once daily for 2 years and oral methotrexate once weekly for 2 years. Treatment continues in the absence of disease relapse or unacceptable toxicity. After completion of study therapy, patients are followed every 3 months for 1 year, every 6 months for 1 year, and then annually for 3 years.