Panobinostat is a pan-deacetylase inhibitor that modulates the expression of oncogenic and immune-mediating genes involved in tumour cell growth and survival. We evaluated panobinostat-induced post-transplant responses and identified correlative biomarkers in patients with multiple myeloma who had failed to achieve a complete response after autologous transplantation. Patients received panobinostat 45 mg administered three-times weekly (TIW) on alternate weeks of 28-day cycles commencing 8–12 weeks post-transplant. Twelve of 25 patients (48%) improved their depth of response after a median (range) of 4·3 (1·9–9·7) months of panobinostat. In responders, T-lymphocyte histone acetylation increased after both three cycles (P < 0·05) and six cycles (P < 0·01) of panobinostat when compared to baseline, with no differences in non-responders. The reduction in the proportion of CD127+CD8+ T cells and CD4:CD8 ratio was significantly greater, after three and six cycles of panobinostat compared to pre-transplant, in non-responders when compared to responders. Whole marrow RNA-seq revealed widespread transcriptional changes only in responders with baseline differences in genes involved in ribosome biogenesis, oxidative phosphorylation and metabolic pathways. This study confirmed the efficacy of panobinostat as a single agent in multiple myeloma and established acetylation of lymphocyte histones, modulation of immune subsets and transcriptional changes as pharmacodynamic biomarkers of clinical benefit.