Alternative polyadenylation increases transcriptome diversity by generating multiple transcript isoforms from a single gene. It is thought that this process can be subject to epigenetic regulation, but few specific examples of this have been reported. We previously showed that the Mcts2/H13 locus is subject to genomic imprinting and that alternative polyadenylation of H13 transcripts occurs in an allele-specific manner, regulated by epigenetic mechanisms. Here, we demonstrate that allele-specific polyadenylation occurs at another imprinted locus with similar features. Nap1l5 is a retrogene expressed from the paternally inherited allele, is situated within an intron of a 'host' gene Herc3, and overlaps a CpG island that is differentially methylated between the parental alleles. In mouse brain, internal Herc3 polyadenylation sites upstream of Nap1l5 are used on the paternally derived chromosome, from which Nap1l5 is expressed, whereas a downstream site is used more frequently on the maternally derived chromosome. Ablating DNA methylation on the maternal allele at the Nap1l5 promoter increases the use of an internal Herc3 polyadenylation site and alters exon splicing. These changes demonstrate the influence of epigenetic mechanisms in regulating Herc3 alternative mRNA processing. Internal Herc3 polyadenylation correlates with expression levels of Nap1l5, suggesting a possible role for transcriptional interference. Similar mechanisms may regulate alternative polyadenylation elsewhere in the genome.