OBJECTIVES: I. Determine the maximum tolerated dose and dose limiting toxicity of topotecan when combined with ifosfamide in patients with limited or extensive stage small cell lung cancer. II. Determine the pharmacokinetics of topotecan and correlate with toxicity or tumor response in these patients. III. Determine the effect of topotecan on apoptosis in tumor tissues and correlate the apoptosis-inducing effects with antitumor effects of topotecan in these patients. IV. Determine the response rate, time to progression, and survival of chemotherapy naive limited or extensive stage small cell lung cancer patients treated with ifosfamide and topotecan and then crossover consolidation/salvage therapy with carboplatin and etoposide. V. Determine the response rate, time to progression, and survival of pretreated limited or extensive stage small cell lung cancer patients treated with ifosfamide and topotecan as salvage therapy.