Background Temozolomide (TMZ) resistance has become an important obstacle affecting its therapeutic benefits. O6-methylguanine DNA methyltransferase (MGMT) is primarily responsible for the TMZ resistance in Glioblastoma multiforme (GBM) patients. In addition, active DNA damage repair pathways can also lead to TMZ resistance. Here, we reported a novel small-molecule inhibitor EPIC-0412 that improved the therapeutic efficacy of TMZ by inhibiting the DNA damage repair pathway and MGMT in GBM via epigenetic pathways. Methods The small-molecule compound EPIC-0412 was obtained through high-throughput screening. RNA immunoprecipitation (RIP), chromatin isolation by RNA purification (ChIRP), and chromatin immunoprecipitation (ChIP) assays were used to verify the effect of EPIC-0412. Co-immunoprecipitation (Co-IP) was used to elucidate the interactions of transcription factors at the MGMT promoter region. Animal experiments using a mouse model were performed to verify the efficacy of EPIC-0412 in sensitizing GBM cells to TMZ. Results EPIC-0412 physically interrupts the binding of HOTAIR and EZH2, leading to the upregulation of CDKN1A and BBC3, causing cell cycle arrest and apoptosis in GBM cells. EPIC-0412 inhibits DNA damage response in GBM cells through the p21-E2F1 DNA damage repair axis. EPIC-0412 epigenetically silences MGMT through its interaction with the ATF3-p-p65-HADC1 axis at the MGMT promoter region. The application of EPIC-0412 restored the TMZ sensitivity in GBM in vivo experiments. Conclusion This study discovered a small-molecule inhibitor EPIC-0412, which enhanced the chemotherapeutic effect of TMZ by acting on the p21-E2F1 DNA damage repair axis and ATF3-p-p65-MGMT axis, providing evidence for combining epigenetic drugs to increase the sensitization toward TMZ in GBM patients.