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Background  The demosponge  Amphimedon queenslandica  is amongst the few early-branching metazoans with an assembled and annotated draft genome, making it an important species in the study of the origin and early evolution of animals. Current gene models in this species are largely based on  in silico  predictions and low coverage expressed sequence tag (EST) evidence.    Results   Amphimedon queenslandica  protein-coding gene models are improved using deep RNA-Seq data from four developmental stages and CEL-Seq data from 82 developmental samples. Over 86% of previously predicted genes are retained in the new gene models, although 24% have additional exons; there is also a marked increase in the total number of annotated 3’ and 5’ untranslated regions (UTRs). Importantly, these new developmental transcriptome data reveal numerous previously unannotated protein-coding genes in the  Amphimedon  genome, increasing the total gene number by 25%, from 30,060 to 40,122. In general,  Amphimedon  genes have introns that are markedly smaller than those in other animals and most of the alternatively spliced genes in  Amphimedon  undergo intron-retention; exon-skipping is the least common mode of alternative splicing. Finally, in addition to canonical polyadenylation signal sequences,  Amphimedon  genes are enriched in a number of unique AT-rich motifs in their 3’ UTRs.    Conclusions  The inclusion of developmental transcriptome data has substantially improved the structure and composition of protein-coding gene models in  Amphimedon queenslandica , providing a more accurate and comprehensive set of genes for functional and comparative studies. These improvements reveal the  Amphimedon  genome is comprised of a remarkably high number of tightly packed genes. These genes have small introns and there is pervasive intron retention amongst alternatively spliced transcripts. These aspects of the sponge genome are more similar unicellular opisthokont genomes than to other animal genomes.    Electronic supplementary material  The online version of this article (doi:10.1186/s12864-015-1588-z) contains supplementary material, which is available to authorized users.

Deep developmental transcriptome sequencing uncovers numerous new genes and enhances gene annotation in the sponge Amphimedon queenslandica