Larval behaviour, settlement, and metamorphosis were investigated in four Caribbean commercial sponges,Hippospongia lachne, Spongia barbara, S. cheirisandS. graminea, using light and transmission electron microscopy. The parenchymella larvae of these viviparous and gonochoristic species have an average size of 350 μm by 420 μm when released. Symbiotic bacteria occur intercellularly in both larvae and post-larvae. Laboratory behavioural studies demonstrate that free-swimming larvae display directional swimming with constant lateral rotation and negative phototaxis. Larval settlement occurs 26–56 hours after release from the parent and involves the formation of a basal lamella between the post-larva and substrate. There is no evidence of larval substrate selection by type or orientation. The canal system begins to form six days after settlement and oscules are apparent eleven days post-settlement. Available evidence suggests that larval ciliated epithelial cells are terminally differentiated and do not appear to contribute to formation of post larva or adult in this group of Porifera.