Background: The gutless marine worm Olavius algarvensis has a completely reduced digestive and excretory system, and lives in an obligate nutritional symbiosis with bacterial symbionts. While considerable knowledge has been gained of the symbionts, the host has remained largely unstudied. Here, we generated transcriptomes and proteomes of O. algarvensis to better understand how this annelid worm gains nutrition from its symbionts, how it adapted physiologically to a symbiotic lifestyle, and how its innate immune system recognizes and responds to its symbiotic microbiota. Results: Key adaptations to the symbiosis include (i) the expression of gut-specific digestive enzymes despite the absence of a gut, most likely for the digestion of symbionts in the host's epidermal cells; (ii) a modified hemoglobin that may bind hydrogen sulfide produced by two of the worm's symbionts; and (iii) the expression of a very abundant protein for oxygen storage, hemerythrin, that could provide oxygen to the symbionts and the host under anoxic conditions. Additionally, we identified a large repertoire of proteins involved in interactions between the worm's innate immune system and its symbiotic microbiota, such as peptidoglycan recognition proteins, lectins, fibrinogen-related proteins, Toll and scavenger receptors, and antimicrobial proteins. Conclusions: We show how this worm, over the course of evolutionary time, has modified widely-used proteins and changed their expression patterns in adaptation to its symbiotic lifestyle and describe expressed components of the innate immune system in a marine oligochaete. Our results provide further support for the recent realization that animals have evolved within the context of their associations with microbes and that their adaptive responses to symbiotic microbiota have led to biological innovations.