The existence of chemical-biological interactions is routinely invoked to explain patterns of coexistence between neighboring organisms. This study characterizes the consequences of these interactions in interspecific space competition between the neighboring species Plakortis halichondroides, the liver sponge, and Agaricia lamarcki, the sheet coral. This sponge/coral association was studied in situ both at points of natural contact and following manipulations that artificially brought the sponge and coral together. Plakortis kills Agaricia upon direct contact and upon indirect contact (i.e., waterborne metabolites only). Plakortis creates a dead zone of coral around its base as it overgrows the coral. The effect of either direct or indirect contact by Plakortis is to reduce: (1) the number of zooxanthellae in Agaricia, (2) the weight of chlorophyll a per unit area of the coral, and (3) the weight of tissue nitrogen per unit area of the coral.The necrotic effect also evidences itself as changes in oxygen flux characteristics such as significant increases in the compensation point and the nocturnal respiration rate, and significant reductions in the maximum net and gross photosynthetic rates. As a consequence, the diel integrated production to respiration ratio falls below unity for Agaricia colonies in contact with Plakortis; this does not occur for coral without neighboring sponges.Because direct contact between Plakortis and Agaricia is not necessary to effect stress in the coral, the presence of active chemical metabolites from Plakortis is suggested. Thus, mechanical abrasion is excluded as the sole mechanism of dominance by the sponge.