Next-generation sequencing technology is now frequently being used to develop genomic tools for non-model organisms, which are generally important for advancing studies of evolutionary ecology. One such species, the marine annelid Streblospio benedicti, is an ideal system to study the evolutionary consequences of larval life history mode because the species displays a rare offspring dimorphism termed poecilogony, where females can produce either many small offspring or a few large ones. To further develop S. benedicti as a model system for studies of life history evolution, we apply 454 sequencing to characterize the transcriptome for embryos, larvae, and juveniles of this species, for which no genomic resources are currently available. Here we performed a de novo alignment of 336,715 reads generated by a quarter GS-FLX (Roche 454) run, which produced 7,222 contigs. We developed a novel approach for evaluating the site frequency spectrum across the transcriptome to identify potential signatures of selection. We also developed 84 novel single nucleotide polymorphism (SNP) markers for this species that are used to distinguish coastal populations of S. benedicti. We validated the SNPs by genotyping individuals of different developmental modes using the BeadXPress Golden Gate assay (Illumina). This allowed us to evaluate markers that may be associated with life-history mode.