The old observations of H. J. Carter and others on the contractile vacuoles of sponge cells have been questioned in recent years. The presence of contractile vacuoles is here established in both amoebocytes and choanocytes of the fresh-water sponges; but they have not been seen in the cells of several marine sponges, though figured by some of the older authors. Methods are described for observing the vacuoles, and incidentally other activities of the cells also. Young sponges grown from gemmules were very useful in these studies and it was found possible to have them throughout the winter months by a simple process of vernalization. Attention is drawn to the importance of these observations in any consideration of the relationships of the Porifera to the Protozoa and to the Metazoa respectively.