XAF1 is a newly identified candidate tumour-suppressor gene that can antagonise XIAP and sensitise cells to cell death triggers. This study was undertaken to study the effect of 5-azacytidine (AZA) on XAF1 expression in myeloma cells and efficacy of 5-AZA and arsenic trioxide (ATO) combination treatment in myeloma in vivo and in vitro. XAF1 expression was analysed by semi-quantitative PCR and western blotting. Methylation specific PCR was used to detect methylation status of XAF1 promoter CpG islands. RPMI 8226 and XG-7 cells were treated with various concentrations of 5-AZA and ATO. Expression of XAF1 mRNA variants were confirmed by gel electrophoresis and sequencing. Untreated RPMI 8226 cell expresses two variants of XAF1 mRNA. Untreated XG-7 cell has no expression of XAF1. Hypermethylation of XAF1 promoter CpG islands was detected in both cell lines. Both cell lines express full-length XAF1 transcript after treated with 2.5 mumol/L 5-AZA for 72 h. Our studies demonstrated that 5-AZA exhibits anti-myeloma synergy with ATO. In addition, ATO alone, 5-AZA alone, or combination of 5-AZA and ATO was effective in slowing myeloma growth and prolonging survival of myeloma-loaded nude mice. The findings suggested that 5-AZA and ATO may be an effective combination in the therapy of myeloma patients.