Malignant rhabdoid tumors (MRTs) are among the most aggressive and treatment-resistant malignancies affecting infants, originating in the kidney, brain, liver, and soft tissues. The 5-year event-free survival rate for these cancers is a mere 20%. In nearly all cases of MRT, the SMARCB1 gene (occasionally SMARCA4)—a pivotal component of the SWI/SNF chromatin remodeling complex—is homozygously deleted, although the precise etiology of these tumors remains unknown. While young patients with localized MRT generally show improved outcomes, especially those who are older and have early-stage disease, the overall prognosis remains poor despite optimal standard treatments. This highlights the urgent need for more effective treatment strategies. We investigated the antitumor activity of a PARP1 inhibitor (talazoparib, TLZ) combined with a DNA alkylating agent (temozolomide, TMZ) in MRT xenograft models. PARP1 is a widely targeted molecule in cancer treatment and, beyond its role in DNA repair, it participates in transcriptional regulation by recruiting chromatin remodeling complexes to modulate DNA accessibility for RNA polymerases. To widen the therapeutic window of the drug combination, we employed PEGylated TLZ (PEG~TLZ), which has been reported to reduce systemic toxicity through slow drug release. Remarkably, our findings indicate that five out of six MRT xenografts exhibited an objective response to PEG~TLZ+TMZ therapy. Significantly, the loss of SMARCB1 was found to confer a protective effect, correlating with higher expression levels of DNA damage and repair proteins in SMARCB1-deficient MRT cells. Additionally, we identified MGMT as a potential biomarker indicative of in vivo MRT response to PEG~TLZ+TMZ therapy. Moreover, our analysis revealed alterations in signaling pathways associated with the observed antitumor efficacy. This study presents a novel and efficacious therapeutic approach for MRT, along with a promising candidate biomarker for predicting tumor response.