Although eusociality evolved independently within several orders of insects, research into the molecular underpinnings of the transition towards social complexity has been confined primarily to Hymenoptera (for example, ants and bees). Here we sequence the genome and stage-specific transcriptomes of the dampwood termite Zootermopsis nevadensis (Blattodea) and compare them with similar data for eusocial Hymenoptera, to better identify commonalities and differences in achieving this significant transition. We show an expansion of genes related to male fertility, with upregulated gene expression in male reproductive individuals reflecting the profound differences in mating biology relative to the Hymenoptera. For several chemoreceptor families, we show divergent numbers of genes, which may correspond to the more claustral lifestyle of these termites. We also show similarities in the number and expression of genes related to caste determination mechanisms. Finally, patterns of DNA methylation and alternative splicing support a hypothesized epigenetic regulation of caste differentiation.