Combination epigenetic treatment (EGT) utilizing DNA methyl transferase inhibitors (DNMTi) and histone deacetylase inhibitors (HDACi) may be more efficacious than single agent treatment in myelodysplastic syndromes (MDS) and acute myeloid leukemia (AML). The molecular mechanisms behind the potential clinical efficacy of combination EGT treatment are incompletely understood and the frequently lengthy EGT regimes required to determine clinical response have generated a significant demand for early molecular markers of treatment response. Our study aimed to identify the effect of combination azacitidine (AZA) and panobinostat (LBH589) on expression levels of a panel of genes implicated in the pathogenesis of high-risk MDS or AML in HL-60 cells. We also characterized gene expression profiles in peripheral blood mononuclear (PBMCs) from patients in a recently reported phase Ib/II clinical trial using the combination of AZA and LBH589 and correlated these findings with clinical response to treatment. In vitro analysis demonstrated increased expression of caspase-3, Nor-1, NUR77, p15INK4B and p21WAF1/CIP1 and decreased expression of Bcl-xL in HL-60 cells treated with combination EGT. Analysis of patient samples prior to treatment demonstrated a significant reduction in NUR77 and p21WAF1/CIP1 expression compared to healthy controls. NUR77 and p21WAF1/CIP1 levels were similar between treatment non-responders and responders at screening. Early post first cycle treatment (day 25) analysis demonstrated a significant increase in expression of both NUR77, and p21WAF1/CIP1. A significant increase in NUR77, and p21WAF1/CIP1 together with a trend to increase in p15INK4B first cycle expression was observed in treatment responders compared to non-responders. In summary, combination AZA and LBH589 epigenetic treatment is associated with in vitro and in vivo modulation of genes implicated in the pathogenesis of MDS/AML. Early expression of NUR77 and p21WAF1/CIP1 correlated with clinical response to combination EGT suggesting investigation for potential use as molecular markers of early treatment response may be warranted.