Lough Hyne was Europe's first Marine Nature Reserve and is a well known biodiversity hotspot that supports extensive sponge assemblages. The unusual, but predictable, flow and sedimentation regimes have important impacts on the sponge assemblages at the species and assemblage levels. Here I present a review of recent sponge research at Lough Hyne, which covers: (1) a description of the sponge-dominated habitats; (2) the biological and physical factors controlling sponge biodiversity and abundance; (3) sponge species and assemblage level morphological variability; and (4) the relationship between sponge morphological, species and functional diversity. It appears that physical factors are primarily responsible for the sponge diversity and abundance patterns found in Lough Hyne, although the importance of intra- and interphyletic (particularly with algae) competitive interactions requires further investigation. Although our knowledge of how sponges respond and adapt to environmental variability has increased substantially because of the research conducted at Lough Hyne, I have highlighted a number of future research areas in the context of Lough Hyne sponge assemblages, which are relevant to understanding structuring processes across the globe.