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Treatment with azacitidine (AZA), a demethylating agent, prolonged overall survival (OS) vs conventional care in patients with higher-risk myelodysplastic syndromes (MDS). As median survival with monotherapy is < 2 years, novel agents are needed to improve outcomes. This phase 1b/2b trial (n = 113) was designed to determine the maximum tolerated dose (MTD) or recommended phase 2 dose (RP2D) of panobinostat (PAN)+AZA (phase 1b) and evaluate the early efficacy and safety of PAN+AZA vs AZA monotherapy (phase 2b) in patients with higher-risk MDS, chronic myelomonocytic leukemia or oligoblastic acute myeloid leukemia with < 30% blasts. The MTD was not reached; the RP2D was PAN 30 mg plus AZA 75 mg/m2. More patients receiving PAN +AZA achieved a composite complete response ([CR)+morphologic CR with incomplete blood count+bone marrow CR (27.5% (95% CI, 14.6-43.9%)) vs AZA (14.3% (5.4-28.5%)). However, no significant difference was observed in the 1-year OS rate (PAN+AZA, 60% (50-80%); AZA, 70% (50-80%)) or time to progression (PAN+AZA, 70% (40-90%); AZA, 70% (40-80%)). More grade 3/4 adverse events (97.4 vs 81.0%) and on-treatment deaths (13.2 vs 4.8%) occurred with PAN+AZA. Further dose or schedule optimization may improve the risk/benefit profile of this regimen.