DISEASE CHARACTERISTICS:

• Histologically confirmed indolent lymphoma or leukemia of one of the following subtypes:

  • Chronic lymphocytic leukemia
  • Follicular center lymphoma (grade I or II)
  • Lymphoplasmacytic lymphoma
  • Marginal zone lymphoma (nodal, extranodal, or splenic)
  • Small lymphocytic lymphoma
  • Waldenstrom's macroglobulinemia
• Any stage of disease allowed
• No hairy cell leukemia
• No T-cell lymphomas
• No prior treatment for lymphoma/leukemia

• Considered appropriate for expectant management

  • Must not require cytotoxic therapy

PATIENT CHARACTERISTICS:

Age

• 18 and over

Performance status

• ECOG 0-1

Life expectancy

• Not specified

Hematopoietic

• Absolute neutrophil count at least 1,500/mm^3
• Hemoglobin greater than 10.0 g/dL
• Platelet count greater than 75,000/mm^3

Hepatic

• Bilirubin no greater than 2 times normal
• AST and ALT no greater than 2 times normal

Renal

• Creatinine no greater than 2.0 mg/dL

Cardiovascular

• No uncontrolled congestive heart failure
• No New York Heart Association class III or IV heart disease
• No unstable coronary artery disease
• No myocardial infarction in the past 6 months
• No serious or uncontrolled arrhythmias
• No history of thromboembolic disease

Pulmonary

• No asthma or chronic obstructive pulmonary disease requiring the use of home oxygen or frequent oral steroids (prednisone greater than 20 mg per day for 5 days within the past 3 months)

Other

• HIV negative
• Not pregnant or nursing
• Negative pregnancy test
• Not planning to become pregnant in the next 2 years
• Fertile female patients must use 1 highly effective method and 1 additional effective method of contraception for 1 month prior to, during, and for 1 month after study participation
• Male patients must use effective barrier contraception during and for 1 month after study participation
• Willing and able to participate in the S.T.E.P.S. (System for Thalidomide Education and Prescribing Safety) program
• No contraindications to meeting the requirements of the S.T.E.P.S. program
• No other prior malignancy except curatively treated non-melanoma skin cancer or carcinoma in situ of the cervix
• No peripheral neuropathy

• No poorly controlled diabetes defined by either of the following:

  • Glycosylated hemoglobin greater than 8.0 g/dL
  • Known end organ disease (i.e., nephropathy, retinopathy, or neuropathy)
• No other concurrent illness that would preclude study therapy

PRIOR CONCURRENT THERAPY:

Biologic therapy

• Not specified

Chemotherapy

• See Disease Characteristics

Endocrine therapy

• Not specified

Radiotherapy

• Not specified

Surgery

• Not specified