It evolves into a Marill when you max its friendship, them level up.
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It does not envolve. Azumarill is the final evolution of azurill.
Azurill evolves into Marill when its happiness is high enough. It could be level 5 or level 38 depending on how high its happiness is.
Level it up and happiness. First take it to the day care and level up azurill. Then have it win a contest. Then level it up more. Then show the girl on the first house on the left and see how happy it is. Then battle 1, 2, 3 or 4 more times without it fainting. Then it should evolve into marill.
Azurill is a baby pokemon, so it evolves by happiness, not by level. So just make him super happy, with a soothe bell, dont let him faint, proteins, massages, and eventually he or she will level up and evolve. Also, if it is a male, it has a 40% chance of becoming male upon evolution. just thought id let you know.
Azurill