Glucocorticoids for primary therapy of acute GVHD have limited responses. A phase I/II trial tested 4 weeks of deacetylase inhibitor panobinostat started within 48 h of glucocorticoids (1 mg/kg/day prednisone or equivalent) as primary treatment for patients with either classic acute GVHD (n = 16) or acute GVHD overlapping with chronic (n = 6). Four patients received 2.5 mg/m2 IV three times a week (TIW). Subsequent to discontinuation of IV panobinostat, patients received oral doses (PO). Two patients treated with 10 mg TIW (PO level 1) had progressive GVHD, after which patients were treated with 5 mg TIW (PO level -1; n = 16); 31/41 adverse events were possibly related, including thrombocytopenia (n = 13), leukopenia (n = 7), hypercholesterolemia (n = 3), hypertriglyceridemia (n = 5), anemia (n = 1), fatigue (n = 1), and hepatobiliary disorder (n = 1). GVHD responses were complete (n = 12) or partial (n = 3), with 1 progression at PO level -1. T-regulatory cells increased at day 8, CD4/CD8 and monocytes exhibited enhanced H3 acetylation, and CD4 or CD8 numbers remained unchanged with a decreased interleukin 12p40 plasma level. Panobinostat in combination with prednisone is safe and warrants further testing in GVHD.