Background: Methylation of cytosines in DNA (5mC methylation) is a major epigenetic modification that modulates gene expression and constitutes the basis for mechanisms regulating multiple aspects of embryonic development and cell reprogramming in vertebrates. In mammals, 5mC methylation of promoter regions is linked to transcriptional repression. Transcription regulation by 5mC methylation notably involves the nucleosome remodeling and deacetylase complex (NuRD complex) which bridges DNA methylation and histone modifications. However, less is known about regulatory mechanisms involving 5mC methylation and their function in non-vertebrate animals. In this paper, we study 5mC methylation in the marine annelid worm Platynereis dumerilii, an emerging evolutionary and developmental biology model capable of regenerating the posterior part of its body post-amputation. Results: Using in silico and experimental approaches, we show that P. dumerilii displays a high level of DNA methylation comparable to that of mammalian somatic cells. 5mC methylation in P. dumerilii is dynamic along the life cycle of the animal and markedly decreases at the transition between larval to post-larval stages. We identify a full repertoire of mainly single-copy genes encoding the machinery associated with 5mC methylation or members of the NuRD complex in P. dumerilii and show that this repertoire is close to the one inferred for the last common ancestor of bilaterians. These genes are dynamically expressed during P. dumerilii development and regeneration. Treatment with the DNA hypomethylating agent Decitabine impairs P. dumerilii larval development and regeneration and has long-term effects on post-regenerative growth. Conclusions: Our data reveal high levels of 5mC methylation in the annelid P. dumerilii, highlighting that this feature is not specific to vertebrates in the bilaterian clade. Analysis of DNA methylation levels and machinery gene expression during development and regeneration, as well as the use of a chemical inhibitor of DNA methylation, suggest an involvement of 5mC methylation in P. dumerilii development and regeneration. We also present data indicating that P. dumerilii constitutes a promising model to study biological roles and mechanisms of DNA methylation in non-vertebrate bilaterians and to provide new knowledge about evolution of the functions of this key epigenetic modification in bilaterian animals.