The reproductive cycle of the demosponge Sarcotragus spinosulus from two different shallow environments (La Pierta and La Strea) of the Ionian coasts of Apulia (SE Italy) was studied from February 2006 to February 2007 in 20 tagged specimens. The sponge is viviparous. All the monitored specimens showed sexual reproduction, even if the process usually involved small portions of the sponge tissue. Most of the specimens showed hermaphroditism, with contemporaneous production of oocytes and spermatic cysts in the same reproductive season. Young oocytes occurred from June to September in specimens from La Pierta and from June to October in those from La Strea. Large mature eggs, measuring up to 200 μm, showed a peak in August to September, concomitant with the appearance of spermatic cysts, whose density values were about 100 times higher than those estimated for female elements. At La Pierta, embryos were present for 11 months, whereas at La Strea they were very scarce during the first 4 months of observation, with the results that there was a significant difference in the production of embryos between the two groups of sponges. Embryo development occurred in patches inside the choanosomal region. Cleavage started in September and led in June to a solid stereoblastula, which, only at La Pierta, produced parenchymella larva (371.3 + 31.3 μm on average) from June to July. In the specimens from La Strea, larvae were never observed. The slight differences in the reproductive cycle between the two groups of sponges may be explained in the light of the major variability of the environmental parameters which could have affected the specimens from La Strea negatively.