Terpios hoshinota is a black-colored sponge encrusting both live and dead corals. On examination, we determined that in the mesohyl, unicellular cyanobacteria were distributed extracellularly in dense populations; roughly half of the area in the histological sections was occupied by the cyanobacterial cells in the mesohyl of the inner zone. Pigment extraction tests of whole sponges and microspectrophotometrical analysis of cyanobacterial symbionts showed that the black coloration of the sponge is attributable to extremely densely packed cyanobacteria expressing R-phycoerythrin. Spermatic follicles were found in the mesohyl of specimens collected in summer, indicating seasonal reproduction, which is likely to play a crucial role in long-distance dispersal. We also found a possible oocyte that did not contain cyanobacteria in the ooplasm.