RATIONALE: PS-341 may stop the growth of cancer cells by blocking the enzymes necessary for cancer cell growth.

PURPOSE: Phase I trial to study the effectiveness of PS-341 in treating patients who have refractory or relapsed acute myeloid leukemia, acute lymphoblastic leukemia, chronic myeloid leukemia in blast phase, or myelodysplastic syndrome.

OBJECTIVES: I. Determine the maximum tolerated dose of PS-341 in patients with refractory or relapsed acute myeloid leukemia, acute lymphoblastic leukemia, myelodysplastic syndrome, or chronic myeloid leukemia in blast phase. II. Assess the plasma pharmacology of this drug, its ability to inhibit proteasome function and to accelerate apoptosis in circulating blasts in this patient population. III. Assess the antileukemic effects of this drug in these patients.

OUTLINE: This is a dose-escalation study. Patients receive PS-341 IV bolus twice weekly for 4 weeks followed by 2 weeks of rest. Treatment continues for a maximum of 12 courses in the absence of unacceptable toxicity or disease progression. Cohorts of 2 patients receive escalating doses of PS-341 until the maximum tolerated dose (MTD) is determined. The MTD is defined as the dose level associated with toxicity probability closest to 0.2 after 30 patients are treated.

PROJECTED ACCRUAL: A total of 30 patients will be accrued for this study within 10 months.

• Leukemia
• Myelodysplastic Syndromes

DISEASE CHARACTERISTICS: Acute myeloid leukemia, acute lymphoblastic leukemia, or high-risk myelodysplastic syndrome (i.e., refractory anemia with excess blasts (RAEB) or RAEB in transformation) that has: Not responded (no complete remission (CR)) to initial induction chemotherapy OR Recurred after an initial CR of less than 1 year OR Recurred after an initial CR of greater than 1 year and failed to respond to an initial reinduction attempt OR Recurred more than once OR Chronic myeloid leukemia in blast phase previously untreated for blast phase or that has failed other treatments for blast phase Refractory or relapsed acute promyelocytic leukemia eligible provided failed a prior tretinoin containing regimen Not likely to benefit from allogeneic bone marrow transplantation (i.e., less than 60 years of physiological age with histocompatible donor) No known brain metastases or CNS disease

PATIENT CHARACTERISTICS: Age: 18 and over Performance status: ECOG 0-2 OR Karnofsky 50-100% Life expectancy: Not specified Hematopoietic: Not specified Hepatic: Bilirubin less than 1.6 mg/dL ALT or AST no greater than 2.5 times upper limit of normal Renal: Creatinine less than 1.6 mg/dL OR Creatinine clearance at least 60 mL/min Cardiovascular: No symptomatic congestive heart failure, unstable angina pectoris, or cardiac arrhythmia Other: Not pregnant or nursing Fertile patients must use effective contraception No other concurrent uncontrolled illness (e.g., ongoing or active infection)

PRIOR CONCURRENT THERAPY: Biologic therapy: Not specified Chemotherapy: See Disease Characteristics At least 2 weeks since prior chemotherapy and recovered At least 24 hours since prior hydroxyurea for rapidly proliferative disease (i.e., absolute peripheral blood blast count at least 5,000/mm3 and increasing by at least 1,000/mm3/24 hours) Endocrine therapy: Not specified Radiotherapy: Not specified Surgery: Not specified Other: No other concurrent investigational agents No concurrent antiretroviral therapy (HAART) for HIV positive patients