RATIONALE: Drugs used in chemotherapy use different ways to stop tumor cells from dividing so they stop growing or die. Radiation therapy uses high-energy x-rays to damage tumor cells. It is not yet known whether giving chemotherapy before combined chemotherapy and radiation therapy is more effective than combined chemotherapy and radiation therapy alone in treating patients with non-small cell lung cancer.

PURPOSE: Randomized phase III trial to compare the effectiveness of carboplatin and paclitaxel followed by radiation therapy and chemotherapy with radiation therapy and chemotherapy alone in treating patients with stage III non-small cell lung cancer that cannot be removed during surgery.

OBJECTIVES: I. Compare the effects of concurrent chemoradiotherapy utilizing carboplatin and paclitaxel with or without prior induction chemotherapy on overall response rate, disease-free survival, and overall survival in patients with unresectable stage III non-small cell lung cancer. II. Compare the effects of these treatments on locoregional vs distant failure in these patients. III. Compare the toxicity of these treatments in these patients.

OUTLINE: This is a randomized study. Patients are stratified by measurable vs evaluable disease. Patients are randomized to 1 of 2 treatment arms: Arm I (immediate concurrent chemoradiotherapy): Patients receive IV paclitaxel over 1 hour followed by IV carboplatin over 30 minutes on day 1, and radiation therapy to the chest 5 times a week beginning on day 1. Treatment repeats weekly for a total of 7 courses. Arm II (induction chemotherapy followed by delayed concurrent chemoradiotherapy): Patients receive IV paclitaxel over 3 hours followed by IV carboplatin over 30 minutes; treatment repeats every 3 weeks for 2 courses. Patients then receive 7 courses of concurrent chemoradiotherapy as in Arm I. Total treatment time is 13 weeks. Patients are followed every 2 months for 2 years, then every 4 months for the next 2 years, then annually thereafter.

PROJECTED ACCRUAL: A total of 360 patients will be accrued for this study within 3 years.

DISEASE CHARACTERISTICS: Histologically or cytologically confirmed non-small cell lung cancer, including: Squamous cell carcinoma Adenocarcinoma (including bronchoalveolar cell) Large cell anaplastic carcinoma (including giant and clear cell carcinomas) Inoperable or unresectable stage IIIA or IIIB disease of the following stage groupings: T1 N2 M0 or T2 N2 M0 T3 N2 M0 and T4 N0-2 M0 eligible if staging is based on closeness to the carina or invasion of the mediastinum or chest wall Patients with contralateral mediastinal disease (N3) or tumors adjacent to but not invading a vertebral body are eligible if all gross disease can be encompassed in the study radiation boost field Patients with a transudate, cytologically negative, nonbloody pleural effusion are eligible if the tumor can be encompassed within a reasonable field of radiotherapy Measurable or evaluable disease

PATIENT CHARACTERISTICS: Age: 18 and over Performance status: CALBG 0-1 Life expectancy: Not specified Hematopoietic: Platelet count at least 100,000/mm3 Absolute granulocyte count at least 1,500/mm3 Hepatic: Bilirubin less than 1.5 mg/dL AST less than 2 times upper limit of normal Renal: Creatinine clearance at least 20 mL/min Other: Not pregnant or nursing Effective contraception required of fertile patients No active second malignancy except nonmelanomatous skin cancer

PRIOR CONCURRENT THERAPY: Biologic therapy: Not specified Chemotherapy: No prior chemotherapy No other concurrent chemotherapy Endocrine therapy: No concurrent hormones except for steroids administered for adrenal failure or septic shock, or hormones administered for non-disease-related conditions (e.g., insulin for diabetes) Glucocorticosteroids permitted as antiemetics Radiotherapy: No prior radiotherapy Surgery: At least 2 weeks since exploratory thoracotomy