While sponges are well-known to be suspension feeders, consumption of dissolved organic carbon (DOC) has recently been highlighted as a mechanism whereby sponges may avoid food limitation. Further, the sponge-loop hypothesis proposes that sponges consume DOC and then release shed cellular detritus back to the reef benthos. We examined the carbon flux mediated by the giant barrel sponge, Xestospongia testudinaria, on reefs in the Red Sea across an inshore–offshore gradient that had previously been proposed to affect sponge nutrition in other parts of the tropics. Seawater samples were collected from the incurrent and excurrent flow of 35 sponges. Concentrations of total organic carbon and its components, DOC, live particulate organic carbon (LPOC), and detritus, were all significantly higher in incurrent seawater on inshore than offshore reefs. The diet of X. testudinaria was comprised primarily of DOC and detritus, with mean values across all reef sites of 61.5% DOC, 34.6% detritus, and 3.9% LPOC. Across the inshore–offshore gradient, there was evidence (1) of a threshold concentration of DOC (≈ 79 μmol C Lseawater−1) below which sponges ceased to be net consumers of DOC, and (2) that sponges on offshore reefs were food limited, with a mean carbon deficit relative to sponges on inshore reef sites. Sponges on offshore reef sites exhibited higher pumping rates, perhaps indicating optimal foraging for POC. As previously demonstrated for Xestospongia muta, and contrary to the sponge-loop hypothesis, there was no evidence that X. testudinaria returned DOC to the benthos in the form of detritus.