To be able to fully comprehend the contribution of the epigenome to embryonic development, it is important to understand how various components of the epigenome evolved. To date, a number of studies have thoroughly described various epigenetic mechanisms in both vertebrates and invertebrates, however there is currently a lack of high resolution epigenomic data corresponding to animals that form the invertebrate-vertebrate boundary. To that end, we have sequenced the genome of the European amphioxus (Branchisotoma lanceolatum) and explored various layers of its epigenome. Our whole genome bisulfite sequencing (MethylC-seq) approach revealed that amphioxus displays invertebrate-like, mosaic DNA methylation patterns as previously observed in this genus. Nevertheless, we found significant DNA methylation remodeling events taking place during tissue differentiation, mostly consisting of developmental hypomethylation. This developmental loss of DNA methylation temporally coincides with the activation of the Tet protein orthologue in the amphioxus genome, suggestive of active demethylation. Altogether, our study provides a rich developmental resource for studying epigenome evolution and demonstrates for the first time the existence of embryonic DNA methylation remodeling in an invertebrate chordate.