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Abstract Insects have evolved remarkably complex social systems. Social wasps are particularly noteworthy because they display gradations in social behaviors. Here, we sequence the genomes of two highly diverged Vespula wasps, V. squamosa and V. maculifrons Buysson (Hymenoptera: Vespidae), to gain greater insight into the evolution of sociality. Both V. squamosa and V. maculifrons are social wasps that live in large colonies characterized by distinct queen and worker castes. However, V. squamosa is a facultative social parasite, and V. maculifrons is its frequent host. We found that the genomes of both species were ~200 Mbp in size, similar to the genome sizes of congeneric species. Analyses of gene expression from members of different castes and developmental stages revealed similarities in expression patterns among immature life stages. We also found evidence of DNA methylation within the genome of both species by directly analyzing DNA sequence reads. Moreover, genes that were highly and uniformly expressed were also relatively highly methylated. We further uncovered evidence of differences in patterns of molecular evolution in the two taxa, consistent with V. squamosa exhibiting alterations in evolutionary pressures associated with its facultatively parasitic or polygyne life history. Finally, rates of gene evolution were correlated with variation in gene expression between castes and developmental stages, as expected if more highly expressed genes were subject to stronger levels of selection. Overall, this study expands our understanding of how social behavior relates to genome evolution in insects.