Sponges act as important microhabitats in the marine environment and promote biodiversity by harboring a wide variety of macrofauna, but little is known about the magnitude and patterns of diversity of sponge-associated communities. This study uses DNA barcoding to examine the macrofaunal communities associated with Stylissa carteri in the central Saudi Arabian Red Sea, an understudied ecosystem with high biodiversity and endemism. In total, 146 operational taxonomic units (OTUs) were distinguished from 938 successfully-sequenced macrofauna individuals from 99 sponges. A significant difference was found in the macrofaunal community composition of S. carteri along a cross-shelf gradient using OTU abundance (Bray–Curtis dissimilarity index), with more amphipods associated with offshore sponges and more brittle stars and fishes associated with inshore sponges. The abundance of S. carteri also showed a gradient, increasing with proximity to shore. However, no significant differences in macrofaunal community composition or total macrofauna abundance were observed between exposed and sheltered sides of the reefs and there was no significant change in total macrofauna abundance along the inshore–offshore gradient. As climate change and ocean acidification continue to impact coral reef ecosystems, understanding the ecology of sponges and their role as microhabitats may become more important for understanding their full ramifications for biodiversity.