Myelodysplastic syndromes and chronic myelomonocytic leukemia are blood disorders characterized by ineffective hematopoiesis and progressive marrow failure that can transform into acute leukemia. The DNA methyltransferase inhibitor 5-azacytidine (AZA) is the most effective pharmacological option, but only ∼50% of patients respond. A response only manifests after many months of treatment and is transient. The reasons underlying AZA resistance are unknown, and few alternatives exist for non-responders. Here, we show that AZA responders have more hematopoietic progenitor cells (HPCs) in the cell cycle. Non-responder HPC quiescence is mediated by integrin α5 (ITGA5) signaling and their hematopoietic potential improved by combining AZA with an ITGA5 inhibitor. AZA response is associated with the induction of an inflammatory response in HPCs in vivo. By molecular bar coding and tracking individual clones, we found that, although AZA alters the sub-clonal contribution to different lineages, founder clones are not eliminated and continue to drive hematopoiesis even in complete responders.