Marine organisms that rely on environmental cues for reproduction are likely to experience shifts in reproductive phenology and output due to global climate change. To assess the role that the environment may play in the reproductive timing for temperate sponges, this study examined sexual and asexual reproduction in New Zealand sponge species (Tethya bergquistae and the Tethya burtoni complex) and correlated reproductive output with temperature, chlorophyll-a concentration, and rainfall. Histological analyses of sponges collected monthly (from February 2015 to February 2017) revealed that these sponges are oviparous and gonochoristic and that they sexually reproduce annually during the austral summer. Both monthly collections and in situ monitoring revealed that Tethya spp. asexually bud continuously, but with greater intensity in the austral spring and summer. Temperature was positively associated with both sexual reproduction and budding, with seasonal cues appearing important. Future shifts in the environment that alter such cues are expected to affect population dynamics of these sponges.