In vertebrates, cytochrome P450 aromatase, encoded by cyp19a1, converts androgens to estrogens and plays important roles in gonadal differentiation and development. The present study examines whether epigenetic mechanisms are involved in cyp19a1a expression and subsequent gonadal development in the hermaphroditic ricefield eel. The expression of the ricefield eel cyp19a1a was stimulated by gonadotropin via the cAMP pathway in the ovary but not the ovotestis or testis. The CpG within the cAMP response element (CRE) of the cyp19a1a promoter was hypermethylated in the ovotestis and testis compared with the ovary. The methylation levels of CpG sites around CRE in the distal region (region II) and around steroidogenic factor 1/adrenal 4 binding protein sites and TATA box in the proximal region (region I) were inversely correlated with cyp19a1a expression during the natural sex change from female to male. In vitro DNA methylation decreased the basal and forskolin-induced activities of cyp19a1a promoter. Chromatin immunoprecipitation assays indicated that histone 3 (Lys9) in both regions I and II of the cyp19a1a promoter were deacetylated and trimethylated in the testis, and in contrast to the ovary, phosphorylated CRE-binding protein failed to bind to these regions. Lastly, the DNA methylation inhibitor 5-aza-2'-deoxycytidine reversed the natural sex change of ricefield eels. These results suggested that epigenetic mechanisms involving DNA methylation and histone deacetylation and methylation may abrogate the stimulation of cyp19a1a by gonadotropins in a male-specific fashion. This may be a mechanism widely used to drive natural sex change in teleosts as well as gonadal differentiation in other vertebrates.