DISEASE CHARACTERISTICS:

   - Histologically confirmed mycosis fungoides/Sézary syndrome

      - Stage IA-IVB disease

   - Must have failed ≥ 1 prior topical treatment, including any of the following:

      - Steroids

      - Nitrogen mustard

      - Retinoids

      - Phototherapy

      - Photochemotherapy

      - Radiotherapy

      - Total skin electron beam

   - Measurable disease with ≥ 1 indicator lesion designated prior to study entry

      - Erythrodermic patients are eligible

PATIENT CHARACTERISTICS:

   - ECOG performance status 0-2

   - WBC ≥ 3,000/mm³

   - ANC ≥ 1,500/mm³

   - Platelet count ≥ 100,000/mm³

   - Creatinine ≤ 2.0 mg/dL

   - Bilirubin ≤ 2.2 mg/dL

   - AST and ALT ≤ 2 times upper limit of normal

   - Not pregnant or nursing

   - Negative pregnancy test

   - Fertile women must use effective double-method contraception for ≥ 4 weeks before,
   during, and for ≥ 4 weeks after completion of study therapy

   - Fertile men must use effective contraception during and for ≥ 4 weeks after completion
   of study therapy

   - No other malignancy within the past 5 years except treated squamous cell and basal
   cell carcinoma of the skin, carcinoma in situ of the cervix, or surgically removed
   melanoma in situ of the skin (stage 0), with histologically confirmed free margins of
   excision and no current evidence of disease

   - No acute infection requiring systemic treatment

   - No known allergic reaction or hypersensitivity to thalidomide

PRIOR CONCURRENT THERAPY:

   - See Disease Characteristics

   - More than 4 weeks since prior topical therapy, systemic chemotherapy, or biological
   therapy

   - No prior stem cell transplantation

   - No other concurrent systemic antipsoriatic or anticancer therapies, including
   radiotherapy, thalidomide, or other investigational agents

   - No other concurrent topical agents except emollients