Fragmentation and propagule formation are alternative reproductive strategies found in both plants and animals, with the latter generally providing greater dispersal capability. When both strategies occur, life history theory predicts that resources should be divided between the two. On coral reefs, both strategies are exhibited by branching corals and sponges, which are broken-up after storm events and rapidly recolonize. In this study, we compared two congeneric Caribbean reef sponges, Callyspongia armigera, which is branched and easily fragmented, and C. vaginalis, which is not, to test whether there is a tradeoff in growth and propagule formation for C. armigera relative to C. vaginalis. Both species were equally abundant on coral reefs off Key Largo, Florida (10.1 +/- 3.7 vs 11.9 +/- 3.0 per 100 m(2), respectively), suggesting that they are equally successful relative to two other non-fragmenting congeneric species (C. fallax and C. plicifera) that are much less common. The number of substratum attachment points per sponge was significantly higher for C. armigera compared to C. vaginalis (2.31 +/- 1.47 vs 1.03 +/- 0.18 sponge(-1)), providing further evidence of the reliance of C. armigera on fragmentation, and of C. vaginalis on recruitment from larval settlement and subsequent growth. Growth rates in predator-exclusion experiments were similar to 4-fold higher for C. armigera compared to C. vaginalis (0.36 +/- 0.31 vs 0.08 +/- 0.11 % initial mass day(-1)), but C. armigera produced similar to 13-fold fewer propagules than C. vaginalis (0.04 +/- 0.22 vs 0.53 +/- 1.08 % tissue area). Our results support a tradeoff between growth and propagule output for C. armigera relative to C. vaginalis, suggesting that these closely related sponge species took different evolutionary trajectories in reconciling their resource constraints.