Dysregulated epigenetic modifications are common in lung cancer but have been reversed using demethylating agent like 5-Aza-CdR. 5-Aza-CdR induces/upregulates the NY-ESO-1 antigen in lung cancer. Therefore, we investigated the molecular mechanisms accompanied with the epigenetic regulation of NY-ESO-1 in 5-Aza-CdR-treated NCI–H1975 cell line. We showed significant induction of the NY-ESO-1 protein (**p < 0.0097) using Cellular ELISA. Bisulfite-sequencing demonstrated 45.6% demethylation efficiency at the NY-ESO-1 gene promoter region and RT-qPCR analysis confirmed the significant induction of NY-ESO-1 at mRNA level (128-fold increase, *p < 0.050). We then investigated the mechanism by which 5-Aza-CdR inhibits cell proliferation in the NCI–H1975 cell line. Upregulation of the death receptors TRAIL (2.04-fold *p < 0.011) and FAS (2.1-fold *p < 0.011) indicate activation of the extrinsic apoptotic pathway. The upregulation of Voltage-dependent anion-selective channel protein 1 (1.9-fold), Major vault protein (1.8-fold), Bax (1.16-fold), and Cytochrome C (1.39-fold) indicate the activation of the intrinsic pathway. We also observed the differential expression of protein Complement C3 (3.3-fold), Destrin (−5.1-fold), Vimentin (−1.7-fold), Peroxiredoxin 4 (−1.6-fold), Fascin (−1.8-fold), Heme oxygenase-2 (−0.67-fold**p < 0.0055), Hsp27 (−0.57-fold**p < 0.004), and Hsp70 (−0.39-fold **p < 0.001), indicating reduced cell growth, cell migration, and metastasis. The upregulation of 40S ribosomal protein S9 (3-fold), 40S ribosomal protein S15 (4.2-fold), 40S ribosomal protein S18 (2.5-fold), and 60S ribosomal protein L22 (4.4-fold) implied the induction of translation machinery. These results reiterate the decisive role of 5-Aza-CdR in lung cancer treatment since it induces the epigenetic regulation of NY-ESO-1 antigen, inhibits cell proliferation, increases apoptosis, and decreases invasiveness.