Late Eocene nearshore shallow-marine environments within the Bremer and western Eucla Basins of southern Western Australia were characterized by the thick deposition of spongolite and spiculite deposits. Epibenthic sponge communities dominated estuaries and topographically complex basin margin embayments-archipelagos, while cool-water carbonates with up to 10% sponges accumulated in open-shelf environments. The transition from a biosiliceous to calcareous epibenthos was related to the degree of palaeogeographical ‘protection’. Within basement-protected embayments there was an offshore gradation from shoreface spongolite and pure spiculite to a muddy spiculite facies towards central embayment areas. Calcareous fossils are rare throughout embayment facies, but rapidly increase in more open outer archipelago areas. This depositional relationship occurred along 2000 km of the Late Eocene southern Australian coastline. Palaeogeographical protection from strong currents acted in concert with: (1) a planar, low-gradient inland topography with sluggish run-off, supplying fine-grained sediment, nutrients, and abundant dissolved silica; and (2) a microtidal setting, weak to moderate swells and opposing wind and Coriolis surface current forcing, which inhibited water exchange between embayments-estuaries and the open shelf. This situation led to an embayment water chemistry that encouraged prolific sponge growth. Calcareous spiculites record the mixing front between these embayment waters and normal open-shelf waters supporting cool-water carbonates.