The transition between shallow and mesophotic coral reef communities in the tropics is characterized by a significant gradient in abiotic and biotic conditions that could result in potential trade-offs in energy allocation. The mesophotic reefs in the Bahamas and the Cayman Islands have a rich sponge fauna with significantly greater percent cover of sponges than in their respective shallow reef communities, but relatively low numbers of spongivores. Plakortis angulospiculatus, a common sponge species that spans the depth gradient from shallow to mesophotic reefs in the Caribbean, regenerates faster following predation and invests more energy in protein synthesis at mesophotic depths compared to shallow reef conspecifics. However, since P. angulospiculatus from mesophotic reefs typically contain lower concentrations of chemical feeding deterrents, they are not able to defend new tissue from predation as efficiently as conspecifics from shallow reefs. Nonetheless, following exposure to predators on shallow reefs, transplanted P. angulospiculatus from mesophotic depths developed chemical deterrence to predatory fishes. A survey of bioactive extracts indicated that a specific defensive metabolite, plakortide F, varied in concentration with depth, producing altered deterrence between shallow and mesophotic reef P. angulospiculatus. Different selective pressures in shallow and mesophotic habitats have resulted in phenotypic plasticity within this sponge species that is manifested in variable chemical defense and tissue regeneration at wound sites.