Inclusion Criteria:  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 1 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 1 prior line of 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 mg/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 may still be eligible if deemed so by study sponsor. For eligibility, only confirmation of archival tissue is needed. Verification of tumor burden in the biopsy is encouraged. For optimal biomarker results, tumor content should be > 30% of total tissue area 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  Exclusion Criteria:  Is currently participating and receiving study therapy or has participated in a study of an investigational agent and received study therapy or used an investigational device within 4 weeks of the first dose of treatment Has received prior temozolomide therapy Patients with a prior or concurrent malignancy whose natural history or treatment has the potential to interfere with the safety or efficacy assessment of the investigational regimen are not eligible for this trial  Symptomatic central nervous system (CNS) metastases and/or carcinomatous meningitis. Subjects with asymptomatic lesions will be eligible if considered appropriate by the treating physician  NOTE: Subjects who are symptomatic and have not undergone prior brain imaging must undergo a head computed tomography (CT) scan or brain MRI within 28 days prior to registration to exclude brain metastases NOTE: A subject with prior brain metastasis may be considered if they have completed their treatment for brain metastasis at least 2 weeks prior to study registration, have been off corticosteroids for ≥ 2 weeks, and are asymptomatic  Clinically significant acute infection requiring systemic antibacterial, antifungal, or antiviral therapy including:  Tuberculosis (clinical evaluation that includes clinical history, physical examination, and radiographic findings, and TB testing in line with local practice) Hepatitis B (known positive HBV surface antigen [HBsAg] result) Hepatitis C, or Human immunodeficiency virus (positive HIV 1/2 antibodies) NOTES: Patients with a past or resolved HBV infection (defined as the presence of hepatitis B core antibody [anti-HBc] and absence of HBsAg) are eligible. In patients with evidence of chronic hepatitis B virus (HBV) infection, the HBV viral load must be undetectable on suppressive therapy, if indicated. Patients positive for hepatitis C (HCV) antibody are eligible only if polymerase chain reaction is negative for HCV ribonucleic acid (RNA). Subjects with HIV/acquired immunodeficiency syndrome (AIDS) with adequate antiviral therapy to control viral load (i.e undetectable) would be allowed if they are stable and have been on treatment for >= 4 weeks prior to first dose of study drug(s). Subjects with viral hepatitis with controlled viral load would be allowed while on suppressive antiviral therapy. Testing not required  Has had prior chemotherapy, immunotherapy, targeted small molecule therapy, or radiation therapy within 2 weeks prior to study day 1 or who has not recovered (i.e., =< grade 1 or at baseline) from adverse events due to a previously administered agent  Note: Subjects with =< grade 2 neuropathy or alopecia due to chemotherapy are an exception to this criterion and may qualify for the study Note: If subject received major surgery, they must have recovered adequately from the toxicity and/or complications from the intervention prior to starting therapy Note: Subjects with irreversible toxicity that in the opinion of the treating physician is not reasonably expected to be exacerbated by the investigational product may be included (e.g., hearing loss, hormone deficiency requiring replacement therapy)  Active or history of autoimmune disease or immune deficiency, including, but not limited to, myasthenia gravis, myositis, autoimmune hepatitis, systemic lupus erythematosus, rheumatoid arthritis, inflammatory bowel disease, antiphospholipid antibody syndrome, Wegener granulomatosis, Sjogren syndrome, Guillain-Barre syndrome, or multiple sclerosis, with the following exceptions:  Replacement therapy (eg., thyroxine, insulin, or physiologic corticosteroid replacement therapy for adrenal or pituitary insufficiency, etc.) is not considered a form of systemic treatment Patients with controlled type 1 diabetes mellitus who are on an insulin regimen are eligible for the study  Patients with eczema, psoriasis, lichen simplex chronicus, or vitiligo with dermatologic manifestations only (e.g., patients with psoriatic arthritis are excluded) are eligible for the study provided all of following conditions are met:  Rash must cover =< 10% of body surface area Disease is well controlled at baseline and requires only low-potency topical corticosteroids No occurrence of acute exacerbations of the underlying condition requiring psoralen plus ultraviolet A radiation, methotrexate, retinoids, biologic agents, oral calcineurin inhibitors, or high-potency or oral corticosteroids within the previous 12 months History of idiopathic pulmonary fibrosis, organizing pneumonia (e.g., bronchiolitis obliterans), drug-induced pneumonitis, or idiopathic pneumonitis, or evidence of active pneumonitis on screening chest computed tomography (CT) scan. History of radiation pneumonitis in the radiation field (fibrosis) is permitted Significant cardiovascular disease (such as New York Heart Association Class II or greater cardiac disease, myocardial infarction, or cerebrovascular accident) within 3 months prior to initiation of study treatment, unstable arrhythmia, or unstable angina Has known psychiatric or substance abuse disorders that would interfere with cooperation with the requirements of the trial Treatment with a live, attenuated vaccine within 4 weeks prior to initiation of study treatment Pregnant or breastfeeding (NOTE: breast milk cannot be stored for future use while the mother is being treated on study) Has a history or current evidence of any condition, therapy, or laboratory abnormality that might confound the results of the trial, interfere with the subject's participation for the full duration of the trial, or is not in the best interest of the subject to participate, in the opinion of the treating investigator