Oogenesis in four commercial Caribbean sponge species,Hippospongia lachne, Spongia barbara, S. cheirisandS. graminea, was studied using light and transmission electron microscopy. Eggs and embryos develop asynchronously in localized endosomal nurseries of these viviparous and gonochoristic species. Statistical analyses of specific morphological characteristics of reproductive elements have unequivocally identified four specific stages in the process of oogenesis. Oogonia undergo mitotic division to produce primary oocytes. Meiotic division occurs producing secondary oocytes which are fertilized before zygotes undergo major growth by phagocytosis and the transfer of nutrients through cytoplasmic bridges. During cleavage of the zygote, umbilici form between embryos and nurse cell layers and these function in the transfer of symbiotic bacteria and other mesohyl substances from the maternal parent to the embryo. These symbionts were observed dispersed between blastomeres of all young and maturing embryos and between internal cells of cytodifferentiated parenchymella larvae. Extracellular transfer of symbiotic bacteria from maternal tissues to developing embryos has not been reported in any other viviparous invertebrate.