This study will test the safety and effectiveness of combination therapy with cyclophosphamide (Cytoxan) and fludarabine in treating lupus nephritis (kidney inflammation). This condition, common in patients with systemic lupus erythematosus, is caused by abnormal action of immune cells called lymphocytes against the kidneys. Left untreated, severe cases can result in loss of kidney function. The current treatment of choice-intermittent high doses (pulses) of cyclophosphamide-does not work in all patients and causes infertility in many women. The rate of infertility in men is not known. This study will examine whether fludarabine can safely be given with significantly lower doses of cyclophosphamide, and if this combination controls kidney inflammation.