DNA methylation is a tightly regulated epigenetic mark associated with transcriptional repression. Next-generation sequencing of purified methylated DNA obtained from early Xenopus tropicalis embryos demonstrates that this genome is heavily methylated during blastula and gastrula stages. Although DNA methylation is largely absent from transcriptional start sites marked with histone H3 lysine 4 trimethylation (H3K4me3), we find both promoters and gene bodies of active genes robustly methylated. In contrast, DNA methylation is absent in large H3K27me3 domains, indicating that these two repression pathways have different roles. Comparison with chromatin state maps of human ES cells reveals strong conservation of epigenetic makeup and gene regulation between the two systems. Strikingly, genes that are highly expressed in pluripotent cells and in Xenopus embryos but not in differentiated cells exhibit relatively high DNA methylation. Therefore, we tested the repressive potential of DNA methylation using transient and transgenic approaches and show that methylated promoters are robustly transcribed in blastula- and gastrula-stage embryos, but not in oocytes or late embryos. These findings have implications for reprogramming and the epigenetic regulation of pluripotency and differentiation and suggest a relatively open, pliable chromatin state in early embryos followed by reestablished methylation-dependent transcriptional repression during organogenesis and differentiation.