Marine sponges are abundant and diverse components of coral reefs and commonly harbour photosynthetic symbionts in these environments. The most prevalent symbiont is the cyanobacterium, Synechococcus spongiarum, isolated from taxonomically diverse hosts from geographically distant regions. We combined analyses of chlorophyll-a (chl-a) concentrations with line-intercept transect surveys to assess the abundance and diversity of reef sponges hosting photosymbionts on Caribbean coral reefs in the Bocas del Toro Archipelago, Panamá. To identify symbionts, we designed PCR primers that specifically amplify a fragment of the 16S ribosomal RNA gene from S. spongiarum and used these primers to screen potential host sponges for the presence of this symbiont. Chlorophyll-a data divided the sponge community into two disparate groups, species with high (>125 μg/g, N=20) and low (<50 μg/g, N=38) chl-a concentrations. Only two species exhibited intermediate (50–125 μg/g) chl-a concentrations; these species represented hosts with reduced symbiont populations, including bleached Xestospongia muta and the mangrove form of Chondrilla nucula (C. nucula f. hermatypica). Sponges with high and intermediate chl-a concentrations accounted for over one-third of the species diversity and abundance of sponges in these communities. Most (85%) of these sponges harboured S. spongiarum. Molecular phylogenies reveal that S. spongiarum represents a sponge-specific Synechococcus lineage, distinct from free-living cyanobacteria. The prevalence of sponge–photosymbiont associations and dominance of symbiont communities by S. spongiarum suggest a major role of this cyanobacterium in sponge ecology and primary productivity on coral reefs.