The mid-Ediacaran Mistaken Point biota of Newfoundland represents the first morphologically complex organisms in the fossil record. At the classic Mistaken Point localities the biota is dominated by the enigmatic group of “fractally” branching organisms called rangeomorphs. One of the few exceptions to the rangeomorph body plan is the fossil Thectardis avalonensis, which has been reconstructed as an upright, open cone with its apex in the sediment. No biological affinity has been suggested for this fossil, but here we show that its body plan is consistent with the hydrodynamics of the sponge water-canal system. Further, given the habitat of Thectardis beneath the photic zone, and the apparent absence of an archenteron, movement, or a fractally designed body plan, we suggest that it is a sponge. The recognition of sponges in the Mistaken Point biota provides some of the earliest body fossil evidence for this group, which must have ranged through the Ediacaran based on biomarkers, molecular clocks, and their position on the metazoan tree of life, in spite of their sparse macroscopic fossil record. Should our interpretation be correct, it would imply that the paleoecology of the Mistaken Point biota was dominated by sponges and rangeomorphs, organisms that are either known or hypothesized to feed in large part on dissolved organic carbon (DOC). The biology of these two clades gives insight into the structure of the Ediacaran ocean, and indicates that a non-uniformitarian mechanism delivered labile DOC to the Mistaken Point seafloor.