Background: Although hypomethylating agents are currently used to treat patients with cancer, whether they can also reactivate and up-regulate oncogenes is not well elucidated. Methods: We examined the effect of hypomethylating agents on SALL4, a known oncogene that plays an important role in myelodysplastic syndrome and other cancers. Paired bone marrow samples that were obtained from two cohorts of patients with myelodysplastic syndrome before and after treatment with a hypomethylating agent were used to explore the relationships among changes in SALL4 expression, treatment response, and clinical outcome. Leukemic cell lines with low or undetectable SALL4 expression were used to study the relationship between SALL4 methylation and expression. A locus-specific demethylation technology, CRISPR. DNMT1-interacting RNA (CRISPR-DiR), was used to identify the CpG island that is critical for SALL4 expression. Results: SALL4 up-regulation after treatment with hypomethylating agents was observed in 10 of 25 patients (40%) in cohort 1 and in 13 of 43 patients (30%) in cohort 2 and was associated with a worse outcome. Using CRISPR-DiR, we discovered that demethylation of a CpG island within the 5′ untranslated region was critical for SALL4 expression. In cell lines and patients, we confirmed that treatment with a hypomethylating agent led to demethylation of the same CpG region and up-regulation of SALL4 expression. Conclusions: By combining analysis of patient samples with CRISPR-DiR technology, we found that demethylation and up-regulation of an oncogene after treatment with a hypomethylating agent can indeed occur and should be further studied.