Demosponge "sphinctozoans" and inozoid calcareous sponges are major constituents of the Upper Permian, Upper Capitan Limestone in the Guadalupe Mountains of New Mexico and Texas. Systematic description, taxonomy, and the stratigraphic distribution of these sponges are documented in collections from exposures of the Upper Capitan Limestone in the vicinity of Carlsbad Caverns in New Mexico. The fauna appears diverse on a local scale, but when compared to diversity of assemblages of similar age in Tunisia and in Southern China, the assemblage is species poor, with 34 species of "calcareous" sponges and demosponges. Whether this is a local time or geographic gradient must wait additional investigations of sponge faunas from older parts of the Guadalupian series in the Guadalupe Mountains, as well as in localities southward in Texas and Mexico. Upper Capitan exposures near Carlsbad Caverns are at the northernmost end of the long Delaware Basin that was restricted by the Hovey channel to the south. As a consequence of either that restricted ecologic limitation or a time stratigraphic factor, Late Capitan assemblages are characterized by abundant individuals of only a few endemic species, and by relatively primitive cosmopolitan genera and species that were able to persist beyond the ranges of more specialized forms. Species in the collections include the ceractinomorphid porate "sphinctozoans" Cystothalamia guadalupensis (Girty, 1908a), Amblysiphonella cf. A. merlai Parona, 1933, Amblysiphonella species A, Amblysiphonella species B, Discosiphonella mammilosa (King, 1943), Tristratocoelia rhythmica Senowbari-Daryan and Rigby, 1988, Exaulipora permica (Senowbari-Daryan, 1990), type species of the new genus Exaulipora, Parauvanella minima Senowbari-Daryan, 1990, and Platythalamiella(?) sp., all from the families Sebargasiidae Steinmann, 1882, and Colospongiidae Senowbari-Daryan, 1990. The family Solenolmiidae Engeser, 1986 is represented by the new species Preverticillites parva. Among the ceractinomorphid Aporata, the family Thaumastocoeliidae Ott, 1967 is represented by Sollasia ostiolata Steinmann, 1882, and Girtyocoelia beedei (Girty, 1908b). The sclerospongiid Guadalupiidae Termier and Termier, in Termier, et al., 1977a, which includes the family Guadalupiidae Girty, 1908a, is represented by the species Guadalupia zitteliana Girty, 1908a, and Guadalupia explanata (King, 1943), Lemonea cylindrica (Girty, 1908a), Lemonea conica Senowbari-Daryan, 1990, Lemonea polysiphonata Senowbari-Daryan, 1990, and the new species Lemonea exaulifera and Lemonea micra. The Calcarea are represented within the subclass Aspiculata Rigby and Senowbari-Daryan, 1996a, and order Inozoida Rigby and Senowbari-Daryan, 1996a, by the Auriculospongiidae Termier and Termier, 1977a, which includes the large Gigantospongia discoforma Rigby and Senowbari-Daryan, 1996b. and Cavusonella caverna Rigby, Fan, and Zhang, 1989b. Also included are the Peronidellidae Wu, 1991, represented by the species Peronidella cf. P. rigbyi Senowbari-Daryan, 1991, Peronidella(?) delicata new species, and Minispongia constricta (Girty, 1908a), and the new genus and species Bicoelia guadalupensis. The family Virgulidae Termier and Termier, 1977a, is redefined to include the genus Virgola and the species Virgola neptunia (Girty, 1908a), and Virgola rigida (Girty, 1908a,). The family Polysiphonellidae Wu, 1991, (not Polysiphonellidae Belyaeva in Boiko, et al., 1991) is interpreted to include most of the subfamilies originally included by Rigby and Senowbari-Daryan (1996a) in the Virgulispongiidae. The sponge Grossotubinella parallela Rigby, Fan, and Zhang, 1989b is included there in the Preeudinae, with Pseudovirgula tenuis Girty, 1908a. Heliospongid demosponges are represented in the Upper Capitan by Heliospongia ramosa Girty, 1908b, Heliospongia vokesi King, 1943, and Neoheliospongia(?) cf. N. typica Deng, 1981. Fossils of unknown taxonomy, possibly sponges, hydrozoans or algae, are incl