Inclusion Criteria:
* Ability to understand and the willingness to sign a written informed consent document
* Eastern Cooperative Oncology Group (ECOG) performance status 0 to 2
* Participants eligible for this study have either MPN in accelerated phase (AP) or blast phase (BP), defined as:
* MPN-AP is defined by 10% to 19% blasts in the peripheral blood or bone marrow
* MPN-BP is defined by \>= 20% blasts in the blood or bone marrow
* Either MPN-AP or MPN-BP requires a previous diagnosis of polycythemia vera (PV), essential thrombocythemia (ET), primary or secondary myelofibrosis (MF), or MDS/MPN overlap with intermediate-2 or high risk disease according to IPSS as well as progression on or failure to respond to at least one line of therapy
* Participants with ET, PV, or MF that have received prior MPN-associated therapy (e.g., hydroxyurea, hypomethylating agents \[azacitidine, decitabine\], anti-platelet therapies \[e.g., aspirin, anagrelide\], as well as JAK2 inhibitor therapy \[e.g., ruxolitinib or other investigational JAK2 inhibitor\]) are eligible. They must discontinue prior to starting therapy; no wash-out is required
* Female participants of childbearing potential must agree to use adequate contraception (2 forms of contraception or abstinence) from the screening visit until 30 days following the last dose of study treatment. Should a woman become pregnant or suspect she is pregnant while she or her partner is participating in this study, she should inform her treating physician immediately
* Male participants of childbearing potential having intercourse with females of childbearing potential must agree to abstain from heterosexual intercourse or have their partner use 2 forms of contraception from the screening visit until 90 days until the last dose of study treatment. They must also refrain from sperm donation from the screening visit until 90 days following the last dose of study treatment
* Left ventricular ejection fraction at \>= 50% as measured by echocardiogram (ECHO) or multigated acquisition (MUGA) scan (14 days prior to initiating study treatment)
* Candidate for cytotoxic-intensive induction chemotherapy
* Willing to take oral medication
* Serum creatinine =\< 2 x the upper limit of normal (ULN), or glomerular filtration rate \> 20 ml/min/1.73m\^2 as calculated by Cockcroft-Gault formula
* Serum potassium, magnesium, and calcium (corrected for albumin) within institutional normal limits or can be corrected with supplementation
* Total serum bilirubin =\< 2.5 x ULN
* Serum aspartate transaminase (AST) and/or alanine transaminase (ALT) =\< 2.5 x ULN
Exclusion Criteria:
* Ongoing participation in another clinical trial
* Isolated myeloid sarcoma (i.e., participants must have blood or marrow involvement with AML to enter the study)
* Acute promyelocytic leukemia (French-American-British \[FAB\] M3 classification)
* Active central nervous system (CNS) involvement by AML
* Current treatment or treatment within 2 weeks or 5 half-lives (whichever is longer) prior to the first dose of study medication with another investigational medication or current enrollment in another investigational drug protocol (unless there is evidence of rapidly progressive disease in which case a shorter interval from last therapy may be acceptable)
* Any unresolved toxicity equal to or greater than grade 2 from previous anticancer therapy, except for stable chronic toxicities not expected to resolve, such as peripheral neurotoxicity
* Incomplete recovery from any prior surgical procedures or had surgery within 4 weeks prior to study entry, excluding the placement of vascular access
* Disseminated intravascular coagulopathy with active bleeding or signs of thrombosis
* Participants with rapidly progressive disease (defined by blast count doubling within 48 hours) or organ dysfunction that would prevent them from receiving these agents
* Participants with uncontrolled infection will not be enrolled until infection is treated and symptoms controlled
* Participants with an infection receiving treatment (antibiotic, antifungal or antiviral treatment) may be entered into the study but must be afebrile and hemodynamically stable for \>= 72 hours (hrs)
* Known hypersensitivity to ruxolitinib, cytarabine, daunorubicin, or liposomal products
* History of Wilson's disease or other copper metabolism disorder
* Uncontrolled intercurrent illness or any concurrent condition that, in the investigator's opinion, would jeopardize the safety of the participant or compliance with the protocol per investigator's discretion. Including, but not limited to, symptomatic congestive heart failure, unstable angina pectoris, serious cardiac arrhythmia, myocardial infarction within 6 months prior to enrollment, New York Heart Association (NYHA) class III or IV heart failure, severe uncontrolled ventricular arrhythmias
* Participants with prior cumulative anthracycline exposure of greater than 368 mg/m\^2 daunorubicin (or equivalent)
* All participants must discontinue anti-platelet agents or anticoagulants prior to initiation of study drug, including therapeutic doses of aspirin and clopidogrel
