Marine sponges harbor diverse microbial communities, encompassing not only three domains of life including Bacteria, Archaea and eukaryotes, but also many different phyla within Bacteria. This diversity implies a rich source for biodiscovery of new natural products. Here, we review recent progress in our understanding of this genetic diversity, its retrieval via culture and genomic approaches, and its implications for chemical diversity and other biotechnology applications of sponge microorganisms and their genes.