The marine sponge Theonella swinhoei (lithistid Family Theonellidae, Order Astrophorida) has yielded many important, bioactive natural products, most of which share structural features with bacterial natural products. The presence of microbial symbionts in T. swinhoei has been reported, and it was originally suggested that the cytotoxic macrolide swinholide A and many of the bioactive cyclic peptides from T. swinhoei were all produced by simbiotic cyanobacteria. By transmission electron microscopy, we found four distinct cell populations to be consistently present in T. swinhoei: eukaryotic sponge cells, unicellular heterotrophic bacteria, unicellular cyanobacteria and filamentous heterotrophic bacteria. Purification and chemical analyses of each cell type showed the macrolide swinholide A to be limited to the mixed population of unicellular heterotrophic bacteria, and an anti-fungal cyclic peptide occurred only in the filamentous heterotrophic bacteria. Contrary to prior speculation, no major metabolites were located in the cyanobacteria or sponge cells.