 This randomized phase II trial studies how well megestrol acetate or levonorgestrel-releasing intrauterine system works in treating patients with atypical endometrial hyperplasia or endometrial cancer. Progesterone can cause the growth of endometrial cancer cells. Hormone therapy using megestrol acetate or levonorgestrel-releasing intrauterine system may fight endometrial cancer by lowering the amount of progesterone the body makes. It is not yet known whether megestrol acetate is more effective than levonorgestrel-releasing intrauterine system in treating atypical endometrial hyperplasia or endometrial cancer. 