Morphological delineation of sponge species is hindered by the narrow range of fixed diagnostic characters and our limited knowledge of how much phenotypic plasticity the sponge body plan assumes in response to environmental conditions. Here, we make use of the partial mitochondrial cytochromec oxidase subunitI (COI) gene and the second internal transcribed spacer (ITS2) region to assess the taxonomic validity of colour morphotypes observed in the elephant ear sponge Ianthella basta (Pallas, 1776) across its distribution range in northern Australia, and explore levels and patterns of genetic diversity among populations of the species collected from both sides of the Torres Strait. Molecular phylogenetic analyses revealed congruent topologies consistent with three evolutionarily significant units (ESUs) that were independent of the morphology of the sponge. ESUI includes previously morphologically and genetically delineated western Pacific specimens of I.basta (Guam), and probably corresponds to the type specimen originally described from Indonesia. ESUI occurs in almost all sampling sites across northern Australia, suggesting considerable levels of connectivity among reefs throughout the Torres Strait. ESUsII and III are each exclusively associated with a geographic region of high sponge species richness separated by Torres Strait, and probably represent the result of historical population fragmentation.