On Caribbean coral reefs, some sponge species produce chemical defenses, while others do not and are non-fatally grazed by predatory fishes. It has been hypothesized that the latter may compensate for fish grazing by growing faster or rapidly healing wounds. Rates of wound-healing were measured for chemically defended and undefended tubular and vase-shaped sponges on patch reefs in the Florida Keys and Bahamas in 2002. Healing rates were significantly faster during the first few days of the experiment, with rates leveling off after the third day. Chemically undefended sponges healed at significantly faster rates (Callyspongia plicifera, 8% area regenerated per day; Callyspongia vaginalis, 6%; Niphates digitalis, 6%; Xestospongia muta, 6.5%) than chemically defended sponges (Cribrochalina vasculum, 2%; Ircinia campana, 2%; Verongula gigantea, 0%). Orientation of wounds relative to the tidal current had no influence on healing rates. Specimens of Niphates digitalis growing in tubular form had faster healing rates than individuals with vasiform shapes. Our results suggest that Caribbean reef sponges followed two different evolutionary trajectories: chemically defended species deter fish predation and have slow healing rates, while chemically undefended species allocate resources to rapid wound-healing in response to grazing.