Sexual
Most sponges are hermaphrodites (function as both sexes simultaneously), although sponges have no gonads (reproductive organs). Sperm are produced by choanocytes or entire choanocyte chambers that sink into the mesohyl and form spermatic cysts while eggs are formed by transformation of archeocytes, or of choanocytes in some species. Each egg generally acquires a yolk by consuming "nurse cells". During spawning, sperm burst out of their cysts and are expelled via the osculum. If they contact another sponge of the same species, the water flow carries them to choanocytes that engulf them but, instead of digesting them, metamorphose to an ameboid form and carry the sperm through the mesohyl to eggs, which in most cases engulf the carrier and its cargo.
A few species release fertilized eggs into the water, but most retain the eggs until they hatch. There are four types of larvae, but all are balls of cells with an outer layer of cells whose flagellae or cilia enable the larvae to move. After swimming for a few days the larvae sink and crawl until they find a place to settle. Most of the cells transform into archeocytes and then into the types appropriate for their locations in a miniature adult sponge.
Glass sponge embryos start by dividing into separate cells, but once 32 cells have formed they rapidly transform into larvae that externally are ovoid with a band of cilia round the middle that they use for movement, but internally have the typical glass sponge structure of spicules with a cobweb-like main syncitium draped around and between them and choanosyncytia with multiple collar bodies in the center. The larvae then leave their parents' bodies.
Read more about this topic: Sponge, Vital Functions, Reproduction