Vertebrates have highly methylated genomes at CpG positions, whereas invertebrates have sparsely methylated genomes. This increase in methylation content is considered a major regulatory innovation of vertebrate genomes. However, here we report that a sponge, proposed as the potential sister group to the rest of animals, has a highly methylated genome. Despite major differences in genome size and architecture, we find similarities between the independent acquisitions of the hypermethylated state. Both lineages show genome-wide CpG depletion, conserved strong transcription factor methyl-sensitivity and developmental methylation dynamics at 5-hydroxymethylcytosine enriched regions. Together, our findings trace back patterns associated with DNA methylation in vertebrates to the early steps of animal evolution. Thus, the sponge methylome challenges previous hypotheses concerning the uniqueness of vertebrate genome hypermethylation and its implications for regulatory complexity.