Accidental oil spills from shipping and during extraction can threaten marine biota, particularly coral reef species which are already under pressure from anthropogenic disturbances. Marine sponges are an important structural and functional component of coral reef ecosystems; however, despite their ecological importance, little is known about how sponges and their microbial symbionts respond to petroleum products. Here, we use a systems biology-based approach to assess the effects of water-accommodated fractions (WAF) of crude oil, chemically enhanced water-accommodated fractions of crude oil (CWAF), and dispersant (Corexit EC9500A) on the survival, metamorphosis, gene expression, and microbial symbiosis of the abundant reef sponge Rhopaloeides odorabile in larval laboratory-based assays. Larval survival was unaffected by the 100% WAF treatment (107 μg liter-1 polycyclic aromatic hydrocarbon [PAH]), whereas significant decreases in metamorphosis were observed at 13% WAF (13.9 μg liter-1 PAH). The CWAF and dispersant treatments were more toxic, with decreases in metamorphosis identified at 0.8% (0.58 μg liter-1 PAH) and 1.6% (38 mg liter-1 Corexit EC9500A), respectively. In addition to the negative impact on larval settlement, significant changes in host gene expression and disruptions to the microbiome were evident, with microbial shifts detected at the lowest treatment level (1.6% WAF; 1.7 μg liter-1 PAH), including a significant reduction in the relative abundance of a previously described thaumarchaeal symbiont. The responsiveness of the R. odorabile microbial community to the lowest level of hydrocarbon treatment highlights the utility of the sponge microbiome as a sensitive marker for exposure to crude oils and dispersants.IMPORTANCE Larvae of the sponge R. odorabile survived exposure to high concentrations of petroleum hydrocarbons; however, their ability to settle and metamorphose was adversely affected at environmentally relevant concentrations, and these effects were paralleled by marked changes in sponge gene expression and preceded by disruption of the symbiotic microbiome. Given the ecological importance of sponges, uncontrolled hydrocarbon releases from shipping accidents or production could affect sponge recruitment, which would have concomitant consequences for reef ecosystem function.