Sponges and their associated microbial communities are capable of dramatically altering the water chemistry of their surrounding environment by rapidly pumping water through their tissues where nutrients are absorbed and waste products released. This study focuses on the impact of sponge populations on reef ecosystem carbon and nitrogen cycles and describes four principle findings: (1) Sponges with large associated microbial communities obtain the bulk of their carbon from dissolved organic matter (DOM), while sponges without large associated microbial communities feed only on particulate organic matter (POM). (2) Respiration by large sponge populations results in localized acidification of the coral reef ecosystem through the release of CO₂. (3) Some coral reef sponges host coupled nitrification-denitrification and impact the ecosystem N cycle in complex and significant ways. (4) There exists an autocatalytic feedback loop between sponge and nuisance macroalgal populations in which sponges consume algal-derived DOM and algae utilize sponge derived dissolved inorganic nitrogen (DIN). This interaction benefits both the sponge and algal populations in the competition for the limiting resource of space on the reef and may be shifting the reef ecosystem into a new, stable community structure. These findings were only made possible through the use of novel, highly precise in situ underwater instrumentation including mass spectroscopy and spectrophotometric elemental analysis used to identify, quantify, and observe in time-series the various sponge mediated biogeochemical processes.