Epigenetics is involved in sex differentiation of gonochoristic and hermaphroditic fish species, whereby two genes dmrt1 (pro-male) and cyp19a1 (pro-female) are known to play major roles. Barramundi, Lates calcarifer, is an important tropical aquaculture species that undergo natural and permanent male to female sex change, a process for which the exact underlying molecular mechanisms are still unknown. To elucidate whether DNA methylation is involved in sex control of barramundi, a next-generation bisulfite amplicon sequencing approach was used to target 146 CpG sites within proximal promoters and first exons of seven sex-related genes (dmrt1, cyp19a1, amh, foxl2, nr5a2, sox8 and sox9) of 24 testis and 18 ovaries of captive and wild adult barramundi. Moreover, comparative expression profiles of the key dmrt1 and cyp19a1 genes were further investigated using RT-qPCR and Sanger sequencing approaches, whereas expression levels of remaining targeted genes were based on available literature for the species. Results showed that cyp19a1 and amh were more methylated in males, whereas dmrt1 and nr5a2 were more methylated in females (P < 0.001), with no gender differences found for foxl2, sox8 or sox9 genes (P > 0.05). Sex-biased promoter DNA methylation was inversely related to gene expression only for dmrt1 and nr5a2, and directly related to amh expression, whereas no differences in cyp19a1 expression were found between testes and ovaries. Notably, unique sex-specific alternative splicing of dmrt1 and cyp19a1 were discovered, whereby males lacked the full-length aromatase coding cyp19a1 mRNA due to partial or total exon splicing, and females lacked the dmrt1 exon containing the DM-domain sequence. This study advances the current knowledge aiming to elucidate the genetic mechanisms within male and female gonads of this large protandrous hermaphrodite by providing the first evidence of epigenetics and alternative splicing simultaneously affecting key genes (cyp19a1 and dmrt1) central to sex differentiation pathways.