An encrusting sponge, Terpios hoshinota, has the potential to infect all species of stony corals in shallow reefs and killing them. It caused a decline in coral coverage in two south-eastern islands of Taiwan. We proposed two hypotheses to examine how the sponges kill the corals, namely, light blocking and toxins, and tested by in-situ experiments. The results revealed that both light blocking, sponge toxins, and particularly the combination of both factors were effective at inducing tissue damage in stony corals over a short period. Second, to answer why the sponges killed the corals, we tested two hypotheses, namely, gaining nutrients versus gaining substrates for the sponge. By analyzing the stable isotopes 13C and 15N, as well as exploiting an enrichment experiment, it was possible to determine that only approximately 9.5% of the carbon and 16.9% of the nitrogen in the newly grown sponge tissues originated from the enriched corals underneath. The analysis also revealed that the control corals without isotope enrichment had higher δ13C and δ15N than the control sponges, which was an additional indication that T. hoshinota did not rely heavily on corals for nutrients. Therefore, our results support the hypothesis that the encrusting sponge did not kill corals for food or nutrients, but rather for the substrate.