Merkel cell carcinoma (MCC) is a rare, highly aggressive skin cancer for which immune modulation by immune checkpoint inhibitors show remarkable response rates. However, primary or secondary resistance to immunotherapy prevents benefits in a significant proportion of patients. For MCC, one immune escape mechanism is insufficient recognition by T cells due to downregulation of major histocompatibility complex (MHC) class I surface expression. Histone deacetylase (HDAC) inhibitors have been demonstrated to epigenetically reverse low MHC class I antigen expression caused by downregulation of the antigen processing machinery (APM). Domatinostat, an orally available small molecule inhibitor targeting HDAC class I, is currently in clinical evaluation to overcome resistance to immunotherapy. Here, we present novel preclinical data on its efficacy and mode of action in Merkel cell polyomavirus (MCPyV)-positive MCC. Single-cell RNA-sequencing revealed a distinct gene expression signature of cell cycle arrest upon treatment. Accordingly, functional assays showed that it induced G2M arrest and apoptosis. In surviving cells, APM component gene transcription and translation were up-regulated, consequently increasing MHC class I surface expression. Altogether, domatinostat not only exerts direct anti-tumoral effects, but also restores HLA class I surface expression on MCPyV-positive MCC cells. Therefore, restoring surviving MCC cells’ susceptibility to recognition and elimination by cognate cytotoxic T cells.