Sponges have become the focus of studies on molecular evolution and the evolution of animal body plans due to their ancient branching point in the metazoan lineage. Whereas our former understanding of sponge function was largely based on a morphological perspective, the recent availability of the first full genome of a sponge (Amphimedon queenslandica), and of the transcriptomes of other sponges, provides a new way of understanding sponges by their molecular components. This wealth of genetic information not only confirms some long-held ideas about sponge form and function but also poses new puzzles. For example, the Amphimedon sponge genome tells us that sponges possess a repertoire of genes involved in control of cell proliferation and in regulation of development. In vitro expression studies with genes involved in stem cell maintenance confirm that archaeocytes are the main stem cell population and are able to differentiate into many cell types in the sponge including pinacocytes and choanocytes. Therefore, the diverse roles of archaeocytes imply differential gene expression within a single cell ontogenetically, and gene expression is likely also different in different species; but what triggers cells to enter one pathway and not another and how each archaeocyte cell type can be identified based on this gene knowledge are new challenges. Whereas molecular data provide a powerful new tool for interpreting sponge form and function, because sponges are suspension feeders, their body plan and physiology are very much dependent on their physical environment, and in particular on flow. Therefore, in order to integrate new knowledge of molecular data into a better understanding the sponge body plan, it is important to use an organismal approach. In this chapter, we give an account of sponge body organization as it relates to the physiology of the sponge in light of new molecular data. We focus, in particular, on the structure of sponge tissues and review descriptive as well as experimental work on choanocyte morphology and function. Special attention is given to pinacocyte epithelia, cell junctions, and the molecules present in sponge epithelia. Studies describing the role of the pinacoderm in sensing, coordination, and secretion are reviewed. A wealth of recent work describes gene presence and expression patterns in sponge tissues during development, and we review this in the context of the previous descriptions of sponge morphology and physiology. A final section addresses recent findings of genes involved in the immune response. This review is far from exhaustive but intends rather to revisit for non-specialists key aspects of sponge morphology and physiology in light of new molecular data as a means to better understand and interpret sponge form and function today.