Abstract Purpose: The immunomodulatory activity of DNA hypomethylating agents (DHAs) suggests they may improve the effectiveness of cancer immunotherapies. The phase Ib NIBIT-M4 trial tested this hypothesis using the next-generation DHA guadecitabine combined with ipilimumab. Patients and Methods: Patients with unresectable stage III/IV melanoma received escalating doses of guadecitabine 30, 45, or 60 mg/m2/day subcutaneously on days 1 to 5 every 3 weeks, and ipilimumab 3 mg/kg intravenously on day 1 every 3 weeks, starting 1 week after guadecitabine, for four cycles. Primary endpoints were safety, tolerability, and MTD of treatment; secondary were immune-related (ir) disease control rate (DCR) and objective response rate (ORR); and exploratory were changes in methylome, transcriptome, and immune contextures in sequential tumor biopsies, and pharmacokinetics. Results: Nineteen patients were treated; 84% had grade 3/4 adverse events, and neither dose-limiting toxicities per protocol nor overlapping toxicities were observed. Ir-DCR and ir-ORR were 42% and 26%, respectively. Median CpG site methylation of tumor samples (n = 8) at week 4 (74.5%) and week 12 (75.5%) was significantly (P < 0.05) lower than at baseline (80.3%), with a median of 2,454 (week 4) and 4,131 (week 12) differentially expressed genes. Among the 136 pathways significantly (P < 0.05; Z score >2 or ←2) modulated by treatment, the most frequently activated were immune-related. Tumor immune contexture analysis (n = 11) demonstrated upregulation of HLA class I on melanoma cells, an increase in CD8+, PD-1+ T cells and in CD20+ B cells in posttreatment tumor cores. Conclusions: Treatment of guadecitabine combined with ipilimumab is safe and tolerable in advanced melanoma and has promising immunomodulatory and antitumor activity.