Pembrolizumab With or Without Chemotherapy Before Surgery in Treating Patients With Stage I-IIIA Non-Small Cell Lung Cancer

Inclusion Criteria:

* Histologically or cytologically confirmed NSCLC, performed on a biopsy that occurred within the last 60 days
* Computed tomography (CT) within the last 30 days showing radiographic stage I to IIIa lung cancer (mediastinal staging biopsy is allowed but not required) by the American Joint Committee on Cancer (AJCC) 8th edition
* Documentation that the patient is a candidate for surgical resection of their lung cancer by an American Board of Thoracic Surgery-certified surgeon
* Measurable disease per Response Evaluation Criteria in Solid Tumors (RECIST) 1.1 as assessed by the investigator
* Adequate tissue specimens for correlative biomarker analysis. The patient should be willing to provide tissue from a newly obtained core or excisional biopsy of a tumor lesion. Newly-obtained is defined as a specimen obtained up to 8 weeks (56 days) prior to initiation of treatment on day 1. Patients for whom newly-obtained samples cannot be provided (e.g. inaccessible or patient safety concern) may submit an archived specimen only upon agreement from the principal investigator
* Eastern Cooperative Oncology Group (ECOG) performance status of 0 or 1
* Resolution of all acute toxic effects of prior chemotherapy, radiotherapy or surgical procedures to NCI CTCAE version (v)5.0 grade 1
* Be willing and able to provide written informed consent for the trial
* Absolute neutrophil count (ANC) \>= 1500 cells/ microlitre(uL) (within 10 days prior to the start of trial treatment)
* Platelets \>= 100 000 cells/uL (within 10 days prior to the start of trial treatment)
* Hemoglobin \>= 9.0 g/dL or \>= 5.6 mmol/L (criteria must be met without erythropoietin dependency and without packed red blood cell (pRBC) transfusion within last 2 weeks) (within 10 days prior to the start of trial treatment)
* Creatinine =\< 1.5 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) \>= 30 mL/min for patients with creatinine levels \> 1.5 x institutional ULN (within 10 days prior to the start of trial treatment)
* Total bilirubin =\< 1.5 x ULN OR direct bilirubin =\< ULN for patients with total bilirubin levels \> 1.5 x ULN (within 10 days prior to the start of trial treatment)
* Aspartate aminotransferase (AST) (serum glutamic-oxaloacetic transaminase (SGOT)) and alanine aminotransferase (ALT) (serum glutamate pyruvate transaminase (SGPT)) =\< 2.5 x ULN (=\< 5 x ULN for patients with liver metastases) (within 10 days prior to the start of trial treatment)
* International normalized ratio (INR) OR prothrombin time (PT) =\< 1.5 x ULN unless patient is receiving anticoagulant therapy as long as PT or partial thromboplastin time (PTT) is within therapeutic range of intended use of anticoagulants (within 10 days prior to the start of trial treatment)
* Activated partial thromboplastin time (aPTT)/PTT =\< 1.5 x ULN unless patient is receiving anticoagulant therapy as long as PT or partial thromboplastin time (PTT) is within therapeutic range of intended use of anticoagulants (within 10 days prior to the start of trial treatment)
* Female patients of childbearing potential must have a negative urine or serum pregnancy test within 72 hours prior to receiving the first dose of trial medication. If the urine test is positive or cannot be confirmed as negative, a serum pregnancy test will be required
* Male and female patients of childbearing potential must be willing to use an adequate method of contraception as outlined, for the course of the trial through 120 days after the last dose of trial drug

  * Note: Abstinence is acceptable if this is the usual lifestyle and preferred contraception for the patient
* Be willing to provide newly obtained tissue (core biopsy of tumor) for PD-L1 biomarker analysis and, based on the adequacy of the tissue sample quality for assessment of PD-L1 status, received permission for enrollment from the core laboratory. Repeat samples may be required if adequate tissue is not provided. Newly obtained biopsy specimens are preferable to archived samples, and formalin-fixed paraffin-embedded (FFPE) block specimens are preferred to slides. A post-treatment biopsy after pembrolizumab treatment is desirable if patient agrees

  * Collection of an archived tissue sample will also be requested available) to support evaluation of the clinical utility of PD-L1 assessment in newly obtained versus (vs.) archived tissue samples; however, a patient will not be precluded from participating in the study if an archived tissue sample is not available for collection or is otherwise insufficient for analysis

Exclusion Criteria:

* Is ineligible for an operation based on medical or oncologic contraindications to surgery
* Is currently participating in or has participated in a trial of an investigational agent or has used an investigational device within 4 weeks prior to the first dose of trial treatment

  * Note: Patients who have entered the follow-up phase of an investigational trial may participate as long as it has been 4 weeks after the last dose of the previous investigational agent
* Has any component of small cell tumor in the specimen, e.g. mixed NSCLC/small cell
* Has received prior therapy with an anti-Programmed cell death protein 1 (PD-1), anti-Programmed death-ligand 1 (PD-L1) , or anti-Programmed death-ligand 2 (PD-L2) agent or with an agent directed to another stimulatory or co-inhibitory T cell receptor (e.g., cytotoxic T-lymphocyte-associated protein 4 (CTLA-4), OX-40, CD137)
* Has severe hypersensitivity \>= grade 3) to pembrolizumab and/or any of its excipients
* Has a history of (non-infectious) pneumonitis / interstitial lung disease that required treatment with steroids or has current pneumonitis / interstitial lung disease that requires steroids
* Has a known history of human immunodeficiency virus (HIV) infection

  * Note: No HIV testing is required unless mandated by local health authority
* Has a known history of hepatitis B (defined as hepatitis B surface antigen \[HBsAg\] reactive) or known active hepatitis C virus (HCV) (defined as HCV ribonucleic acid \[RNA\] \[qualitative\] is detected) infection

  * Note: No testing for hepatitis B and hepatitis C is required unless mandated by local health authority
* Has a known history of active tuberculosis (TB; Mycobacterium tuberculosis)
* Has received prior radiotherapy within 2 weeks of start of trial treatment. Patients must have recovered from all radiation-related toxicities, not require corticosteroids, and not have had radiation pneumonitis. A 1-week washout is permitted for palliative radiation (=\< 2 weeks of radiotherapy) to non-central nervous system (CNS) disease
* Has received a live vaccine within 30 days prior to the first dose of trial drug. Examples of live vaccines include, but are not limited to, the following: measles, mumps, rubella, varicella/zoster (chicken pox), yellow fever, rabies, Bacillus Calmette-Guerin (BCG), and typhoid vaccine. Seasonal influenza vaccines for injection are generally killed virus vaccines and are allowed; however, intranasal influenza vaccines (e.g., FluMist) are live attenuated vaccines and are not allowed
* Has evidence of clinically significant interstitial lung disease
* Has an active second malignancy, i.e. patient known to have potentially fatal cancer present for which he/she may be (but not necessarily) currently receiving treatment. Patients with a history of malignancy that has been completely treated, with no evidence of that cancer currently, are permitted to enroll in the trial if curative therapy has been completed, such as basal cell carcinoma of the skin or squamous cell carcinoma of the skin that has undergone potentially curative therapy or in situ cervical cancer
* Has a diagnosis of immunodeficiency or is receiving systemic steroid therapy (in dosing exceeding 10 mg daily of prednisone equivalent) or any other form of immunosuppressive therapy within 7 days prior to the first dose of trial treatment
* Has active autoimmune disease that has required systemic treatment in the past 2 years (i.e. with use of disease modifying agents, corticosteroids or immunosuppressive drugs). Replacement therapy (e.g., thyroxine, insulin, or physiologic corticosteroid replacement therapy for adrenal or pituitary insufficiency, etc.) is not considered a form of systemic treatment
* Has an active infection requiring systemic therapy
* Has a history or current evidence of any condition, therapy, or laboratory abnormality that might confound the results of the trial, interfere with the patient?s participation for the full duration of the trial, or is not in the best interest of the patient to participate, in the opinion of the treating investigator, including dialysis
* Has known psychiatric or substance abuse disorders that would interfere with cooperation with the requirements of the trial
* Is pregnant or breastfeeding, or expecting to conceive or father children within the projected duration of the trial, starting with the screening visit through 120 days after the last dose of trial treatment
* Has had an allogeneic tissue/solid organ transplant

ADDITIONAL EXCLUSION CRITERIA For Arm B

* Has squamous cell carcinoma. Adenosquamous and adenocarcinoma with squamous features disease allowed
* Creatinine clearance \< 45 ml/min as calculated by institutional standard
* Is taking any herbal/complementary oral or IV medicine within 4 weeks of first dose of treatment