Cancer-Testis antigens (CTA) are immunogenic molecules with normal tissue expression restricted to testes but with aberrant expression in up to 30% of non-small cell lung cancers (NSCLCs). Regulation of CTA expression is mediated in part through promoter DNA methylation. Recently, immunotherapy has altered treatment paradigms in NSCLC. Given its immunogenicity and ability to be re-expressed through demethylation, NY-ESO-1 promoter methylation, protein expression and its association with programmed death receptor ligand-1 (PD-L1) expression and clinicopathological features were investigated. Lung cancer cell line demethylation resulting from 5-Aza-2'-deoxycytidine treatment was associated with both NY-ESO-1 and PD-L1 re-expression in vitro but not increased chemosensitivity. NY-ESO-1 hypomethylation was observed in 15/94 (16%) of patient samples and associated with positive protein expression (P < 0.0001). In contrast, PD-L1 expression was observed in 50/91 (55%) but strong expression in only 12/91 (13%) cases. There was no association between NY-ESO-1 and PD-L1 expression, despite resultant re-expression of both by 5-Aza-2'-deoxycytidine. Importantly, NY-ESO-1 hypomethylation was found to be an independent marker of poor prognosis in patients not treated with chemotherapy (HR 3.59, P = 0.003) in multivariate analysis. In patients treated with chemotherapy there were no differences in survival associated with NY-ESO-1 hypomethylation. Collectively, these results provided supporting evidence for the potential use of NY-ESO-1 hypomethylation as a prognostic biomarker in stage 3 NSCLCs. In addition, these data highlight the potential to incorporate demethylating agents to enhance immune activation, in tumours currently devoid of immune infiltrates and expression of immune checkpoint genes.