Transitions in developmental mode are common evolutionarily, but how and why they occur is not understood. Developmental mode describes larval phenotypes, including morphology, ecology and behavior of larvae, which typically are generalized across different species. The polychaete worm Pygospio elegans is one of few species polymorphic in developmental mode, with multiple larval phenotypes, providing a possibility to examine the potential mechanisms allowing transitions in developmental mode. We investigated the presence of DNA methylation in P. elegans, and, since maternal provisioning is a key factor determining eventual larval phenotype, we compared patterns of DNA methylation in females during oogenesis in this species. We demonstrate that intragenic CpG site DNA methylation and many relevant genes necessary for DNA methylation occur in P. elegans. Methylation-sensitive AFLP analysis showed that gravid females with offspring differing in larval developmental mode have significantly different methylation profiles and that the females with benthic larvae and non-reproductive females from the same location also differ in their epigenetic profiles. Analysis of CpG sites in transcriptome data supported our findings of DNA methylation in this species and showed that CpG observed/expected ratios differ among females gravid with embryos destined to different developmental modes. The differences in CpG site DNA methylation patterns seen among the samples suggest a potential for epigenetic regulation of gene expression (through DNA methylation) in this species.