Pentostatin, a novel inhibitor of adenosine deaminase, has shown activity in various lymphoid malignancies of both the T and B cell lineage. This agent has unique side effects and in general myelosuppression has been mild. Interferon has both antiviral and antineoplastic properties. This agent has shown activity in hairy cell leukemia, chronic granulocytic leukemia, low grade lymphoma, and myeloma. Side effects from interferon are in general dissimilar to those that have been seen with pentostatin and in particular myelosuppression has not been a major toxicity with low doses of interferon. This current trial explored the combination of pentostatin and interferon in hematologic malignancies. Fifteen patients were enrolled in this phase I trial at a fixed dose of pentostatin of 4 mg/m2 biweekly and interferon at doses of 0.5, 1, 2, or 4 million units/m2 of interferon. At the first three dose levels of interferon nausea and vomiting were the predominant toxicity and appeared to worsen with time on study. Fatigue also was seen at the lowest level of interferon and was severe enough to cause two individuals to discontinue the study medications. At higher dose levels of interferon, myelosuppression, nausea and vomiting, and fatigue were the predominant toxicities. One patient with hairy cell leukemia had a complete response and a second patient with T cell cutaneous lymphoma had a partial response which lasted for 6 to 7 weeks. The maximum tolerated dose of interferon with pentostatin in this patient population was four million units/m2.