Abstract
Cytosine methylation is an ancient epigenetic modification yet its function and extent within genomes is highly variable across eukaryotes. In mammals, methylation controls transposable elements and regulates the promoters of genes. In insects, DNA methylation is generally restricted to a small subset of transcribed genes, with both intergenic regions and transposable elements (TEs) depleted of methylation. The evolutionary origin and the function of these methylation patterns are poorly understood. Here we characterise the evolution of DNA methylation across the arthropod phylum. While the common ancestor of the arthropods had low levels of TE methylation and did not methylate promoters, both of these functions have evolved independently in centipedes and mealybugs. In contrast, methylation of the exons of a subset of transcribed genes is ancestral and widely conserved across the phylum, but has been lost in specific lineages. A similar set of genes is methylated in all species that retained exon-enriched methylation. We show that these genes have characteristic patterns of expression correlating to broad transcription initiation sites and well-positioned nucleosomes, providing new insights into potential mechanisms driving methylation patterns over hundreds of millions of years.