Sea slugs are interesting models to study post-copulatory sexual selection in simultaneous hermaphrodites due to the enormous variation of their reproductive systems. However, the knowledge of the functional morphology of their reproductive system is limited to few species, and it is rarely discussed in the context of sexual selection theory. In this study, we investigated the functional morphology of the spermcontaining chambers (i.e., ampulla, seminal receptacle, and bursa copulatrix) of the reproductive system of Okenia polycerelloides (Ortea & Bouchet, 1983), based on light, confocal, and electron microscopy. Although the morphology of the ampulla is similar to other species, indicating that it is a site for autosperm storage, we found some sperm facing the ampullar epithelium, a feature commonly regarded as characteristic of the seminal receptacle of sea slugs. The seminal receptacle of O. polycerelloides showed secretory activity and contained sperm with distribution and orientation suggestive of stratification of allosperm from distinct mating events, a feature that would affect sperm competition. The bursa copulatrix had epithelial cells with secretory and absorptive characteristics, and contained degraded sperm and yolk granules within its lumen. Comparative analyses of the contents of each organ demonstrated that sperm digestion occurs in the bursa copulatrix and affects sperm heads first, changing their morphology from slender and curved to shorter and ellipsoid before complete lysis. Although digestion and absorption of surplus sperm are currently the main hypothesized functions for the bursa copulatrix, its role in cryptic female choice should not be ruled out. The close structural connection between the seminal receptacle and bursa copulatrix, as well as their muscular walls, would enable control over the fate of the sperm received in each mating event, that is, storage or digestion.