Lenalidomide, Cytarabine, and Idarubicin in Treating Patients With Acute Myeloid Leukemia

Inclusion Criteria: * Cohort 1: Patients must be age \>= 18 and \< 65 with relapsed or refractory AML or high risk myelodysplastic syndrome (MDS); high risk MDS is defined as international prognosis scoring system (IPSS) score of 1.5 or higher; eligible patients will have a score of 1.5 or higher at any time from diagnosis to screening * Cohort 2: Patients must be age \>= 18 with previously untreated AML; favorable risk AML patients \< 60 years of age are excluded; these are defined as core binding factor (CBF) AML patients and characterized by cytogenetic or molecular evidence of CBF leukemia; untreated AML patients \< 60 years of age must be negative on screening for CBF leukemia by cytogenetic or molecular analysis (Note: Prior therapy for MDS is permitted) * Patients with secondary AML or therapy-related disease (transformed \[t\]-AML/MDS) are eligible * If the patient has co-morbid medical illness, life expectancy attributed to this must be greater than 6 months * Eastern Cooperative Oncology Group (ECOG) performance status =\< 2 * Total bilirubin \< 2.0 mg/dL * Aspartate aminotransferase (AST)/alanine aminotransferase (ALT) \< 2.5 times upper limit of normal * Creatinine \< 2.0 mg/dL AND creatinine clearance (calculated) \>= 50 mL/min * Left ventricular ejection fraction (LVEF) \>= 40% * Patients who have previously received lenalidomide, idarubicin, and/or cytarabine are eligible provided that the combination of the 3 agents has never before been administered, and that no lenalidomide has been administered for at least 6 months * Females of childbearing potential (FCBP) must have a negative serum or urine pregnancy test with a minimum sensitivity of at least 25 mIU/mL within 10-14 days prior to and again within 24 hours of starting lenalidomide and must either commit to continued abstinence from heterosexual intercourse or begin TWO acceptable methods of birth control, one highly effective method and one additional effective method AT THE SAME TIME, at least 28 days before she starts taking lenalidomide; FCBP must also agree to ongoing pregnancy testing; men must agree to use a latex condom during sexual contact with a FCBP even if they have had a successful vasectomy; these methods of birth control must be used for the duration of study participation and for 28 days after lenalidomide discontinuation; all patients must be counseled at a minimum of every 28 days about pregnancy precautions and risks of fetal exposure * Ability to understand and willingness to sign the written informed consent document Exclusion Criteria: * Patients who have had chemotherapy or radiotherapy within 2 weeks (6 weeks for nitrosoureas or mitomycin C) prior to entering the study, or those who have not recovered from adverse events due to agents administered more than 4 weeks earlier * Patients who have taken lenalidomide within the last 6 months * Patients receiving any other investigational agents or patients that have received other investigational agents within 14 days of enrollment * Patients with active central nervous system disease or with granulocytic sarcoma as sole site of disease * Patients with history of medically serious allergic reactions or non-hematologic toxicities attributed to the agents in this trial such as lenalidomide or thalidomide or compounds of similar chemical or biologic composition that are not easily managed, or patients with a history of cerebellar toxicity to cytarabine * Patients with the following will be excluded: uncontrolled intercurrent illness including, but not limited to, symptomatic congestive heart failure, unstable angina pectoris, serious cardiac arrhythmia, or psychiatric illness/social situations that would limit compliance with study requirements, myocardial infarction within 6 months prior to enrollment, New York Heart Association (NYHA) class III or IV heart failure, severe uncontrolled ventricular arrhythmias, or electrocardiographic evidence of acute ischemia or active conduction system abnormalities; patients with medical comorbidities that will preclude safety evaluation of the combination should not be enrolled * Patients with serious medical or psychiatric illness likely to interfere with participation in this clinical study * Pregnant women or women who are breastfeeding; additional pregnancy testing before, during, and after lenalidomide treatment is required, as well as requirements for contraception before, during, and after lenalidomide treatment * Patients with advanced malignant solid tumors are excluded; patients with active additional hematologic malignancies are excluded * Patients with a history of neurologic toxicity with cytarabine are excluded * As infection is a common feature of AML, patients with active infection are permitted to enroll provided that the infection is under control; patients with uncontrolled infection shall not be enrolled until infection is treated and brought under control * Known human immunodeficiency virus (HIV)-positive patients are ineligible; appropriate studies will be undertaken in HIV + patients once safety of the combination has been demonstrated