Sponges often exhibit tissue regression in response to stressful conditions. This study investigated whether handling stress invoked tissue regression in Ianthella basta and assessed whether sponges could recover from this regressed tissue state. Six necrotic specimens and 12 healthy explants were collected at Orpheus Is. Australia and transported to aquarium facilities. Sponges were photographed daily and an integrated density (ID) measurement was used to quantify tissue regression. Histological samples were taken from sponge explants to compare cellular organization. Bacterial communities of regressed and recovered tissue were compared using Denaturing Gradient Gel Electrophoresis (DGGE). After 12 h both necrotic and healthy sponges displayed substantial tissue regression. However, within 72 h all sponges recovered to their original condition. The ID of the sponge tissue doubled, confirming tissue recovery in I. basta. Sponges affected by tissue regression had significantly fewer choanocyte chambers and more densely packed granulated cells than recovered sponges. DGGE revealed the same microbial symbionts in both regressed and recovered sponges. Handling stress associated with collection and transportation is sufficient to invoke tissue regression in this species, but sponges can rapidly recover. This study contributes to our understanding of how sponges respond to environmental pressures, influencing population resilience and persistence.