At the point in animal evolution when cells began to adhere to each other they presumably initially functioned as colonies. The formation of an epithelium that enclosed and controlled an internal milieu would have been the first event to distinguish an individual animal from a colony. To better understand when the first epithelium arose and what its characteristics were, we evaluate the morphological, functional, and molecular characters of epithelia in sponges, considered here the extant representatives of the first metazoans. In particular, we show new claudin-like sequences from sponges align most closely with sequences from Drosophila that have a barrier function in septate junctions. We also show that type IV collagen, the main component of the basement membrane (BM), is present in calcareous sponges, and we confirm the presence of type IV-like collagen (spongin short chain collagen) in other sponges. Though in sponges as in other metazoans the epithelium has grades of specialization with varying complexity of junctions and the BM, the main character of a functional epithelium, the ability to seal and control the ionic composition of the internal milieu, is a property of even the simplest sponge epithelium, and therefore the first metazoans likely also had epithelia with these characteristics, which we consider a “true” epithelium. J. Exp. Zool. (Mol. Dev. Evol.) 318B:438–447, 2012. © 2011 Wiley Periodicals, Inc.