• Written informed consent and Health Insurance Portability and Accountability Act (HIPAA) authorization for release of personal health information

‣ NOTE: HIPAA authorization may be included in the informed consent or obtained separately

• Age \>= 18 years at the time of consent

• Eastern Cooperative Oncology Group (ECOG) performance status of 0 or 2 within 28 days prior to registration

• Have histologically or cytologically-documented diagnosis of extensive stage (i.e. metastatic and/or recurrent) small cell lung cancer and have progressed or recurred after platinum-based chemotherapy with immunotherapy. Eligible patients will be defined as follows:

‣ Sensitive Disease: Patients who had one previous line of chemotherapy and relapsed after \> 90 days of completion of treatment

⁃ Resistant Disease: Patients with no response to first-line chemo-immunotherapy or progression \< 90 days after completing treatment

• Measurable disease according to Response Evaluation Criteria in Solid Tumors (RECIST) v1.1 within 28 days prior to registration

• Maximum of 3 prior lines of systemic therapy is allowed in the setting of metastatic disease. Patients who recur after treatment for limited state disease, and who receive first line metastatic treatment with chemo-immunotherapy would be considered eligible upon progression on chemo-IO in the metastatic setting

• Absolute neutrophil count (ANC) \>= 1.5 K/mm\^3 (obtained within 28 days prior to registration)

• Platelets \>= 100,000 / mcL (obtained within 28 days prior to registration)

• Serum creatinine =\< 2.0 X upper limit of normal (ULN) OR measured or calculated creatinine clearance (glomerular filtration rate \[GFR\] can also be used in place of creatinine or creatinine clearance \[CrCl\]) \>= 50 mL/min as estimated by Cockcroft and Gault formula for subject with creatinine levels \> 2 x institutional ULN (obtained within 28 days prior to registration)

• Bilirubin =\< 1.5 X ULN OR direct bilirubin =\< ULN for subjects with total bilirubin levels \> 1.5 ULN

‣ Patients with known Gilbert disease: serum bilirubin =\< 3 x ULN) (obtained within 28 days prior to registration)

• Aspartate aminotransferase (AST) and Alanine aminotransferase (ALT) =\< 3 X ULN OR =\< 5 X ULN for subjects with liver metastases (obtained within 28 days prior to registration)

• Albumin \> 2.5 g/dL (obtained within 28 days prior to registration)

• International normalized ratio (INR) or prothrombin time (PT) =\< 1.5 x ULN for patients not receiving therapeutic anticoagulation (obtained within 28 days prior to registration)

‣ For patients receiving therapeutic anticoagulation: stable anticoagulant regimen

• Activated partial thromboplastin time (aPTT) =\< 1.5 x ULN for patients not receiving therapeutic anticoagulation (obtained within 28 days prior to registration)

‣ For patients receiving therapeutic anticoagulation: stable anticoagulant regimen

• Females of childbearing potential must have a negative serum or urine pregnancy test within 14 days prior to registration

• For women of childbearing potential: agreement to remain abstinent (refrain from vaginal intercourse) or use contraceptive methods and agreement to refrain from donating eggs, as defined below:

‣ Women must remain abstinent or use contraceptive methods with a failure rate of \< 1% per year during the treatment period and for 5 months after the final dose of atezolizumab or temozolomide. Women must refrain from donating eggs during this same period

⁃ Examples of contraceptive methods with a failure rate of \< 1% per year include bilateral tubal ligation, male sterilization, hormonal contraceptives that inhibit ovulation, hormone releasing intrauterine devices, and copper intrauterine devices

⁃ The reliability of sexual abstinence should be evaluated in relation to the duration of the clinical trial and the preferred and usual lifestyle of the patient. Periodic abstinence (e.g., calendar, ovulation, sympto-thermal, or post ovulation methods) and withdrawal are not adequate methods of contraception

• For men able to father a child: agreement to remain abstinent (refrain from vaginal intercourse) or use a condom, and agreement to refrain from donating sperm, as defined below:

‣ With a female partner of childbearing potential or pregnant female partner, men must remain abstinent or use a condom during the treatment period and for 3 months after the final dose of temozolomide to avoid exposing the embryo. Men must refrain from donating sperm during this same period

⁃ The reliability of sexual abstinence should be evaluated in relation to the duration of the clinical trial and the preferred and usual lifestyle of the patient. Periodic abstinence (e.g., calendar, ovulation, symptothermal, or postovulation methods) and withdrawal are not adequate methods of contraception

• As determined by the enrolling physician or protocol designee, ability of the subject to understand and comply with study procedures for the entire length of the study

• Availability of archival tissue, preferably a recent formalin-fixed, paraffin-embedded (FFPE) tumor tissue block. A recently obtained archival FFPE tumor tissue block from a primary or metastatic tumor resection or biopsy can be provided if it was obtained within 1 year of trial screening. Patients with tumor specimens older than 1 year, or who do not have biopsy specimen may still be eligible if deemed so by the sponsor-investigator.

• Be willing to provide peripheral blood samples at specified time-points during the study

• Life expectancy greater than 3 months as determined by the enrolling physician or protocol designee

• Ability to swallow and retain oral medication