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Although azanucleoside DNA-hypomethylating agents (HMAs) are routinely used for the treatment of myelodysplastic syndrome/acute myeloid leukaemia (MDS/AML), very few outcome predictors have been established. Expression of the β-like globin gene locus is tightly regulated by DNA methylation, is HMA-sensitive in vitro, and fetal haemoglobin (HbF) expression is under study as a potential biomarker for response of MDS patients to azacitidine. We determined HbF expression in 16 MDS and 36 AML patients receiving decitabine (DAC). Pre-treatment HbF was already elevated (>1·0% of total haemoglobin) in 7/16 and 12/36 patients, and HbF was induced by DAC in 81%/54% of MDS/AML patients, respectively. Elevated pre-treatment HbF was associated with longer median overall survival (OS): 26·6 vs. 8·6 months for MDS (hazard ratio [HR] 8·56, 95% confidence interval [CI] 1·74–42·49, P = 0·008, with similarly longer progression-free and AML-free survival), and 10·0 vs. 2·9 months OS for AML (HR 3·01, 95% CI 1·26–7·22, P = 0·014). In a multivariate analysis, the prognostic value of HbF was retained. Time-dependent Cox models revealed that the prognostic value of treatment-induced HbF induction was inferior to that of pre-treatment HbF. In conclusion, we provide first evidence for in vivo HbF induction by DAC in MDS/AML, and demonstrate prognostic value of elevated pre-treatment HbF, warranting prospective, randomized studies.