Spatial competition in the intertidal zones drives the community structure in marine benthic habitats. Organisms inhabiting these areas not only need to withstand fluctuations of temperature, water level, pH, and salinity, but also need to compete for the best available space. Sponges are key members of the intertidal zones, and their life history processes (e.g., growth, reproduction, and regeneration) are affected by competition. Here we used transcriptomics to investigate the effects of interspecific competition between the tetillid sponge Cinachyrella cf. cavernosa, the zoantharid Zoanthus sansibaricus, and the macroalgae Dictyota ciliolata. The analysis of differentially expressed genes showed that Z. sansibaricus was the most stressful competitor to C. cf. cavernosa, which showed an increased rate of cellular respiration under stress of competition. Similarly, an up-regulation of energy metabolism, lipid metabolism, and the heat-shock protein (HSP) 70 was also observed along with an indication of a viral infection and decreased ability to synthesise protein. A down-regulation of purine and pyrimidine metabolism indicated reduction in physiological activities of the competing sponges. Moreover, a putative case of possible kleptocnidism, not previously reported in Cinachyrella cf. cavernosa was also observed. This study opens the door for more detailed investigations of marine organisms competing for spatial resources using transcriptome data.