Siliceous spongolite and spiculite are generally interpreted as deep- and/or cold-water deposits, largely because modern analogs are found mostly in cold- and/or deep-water environments. However, extensive shallow-water, biosiliceous accumulations are present in late Eocene age deposits of southern Western Australia. The attributes and paleoenvironmental setting of these accumulations frame the specific climatic and/or oceanographic constraints that allow such shallow neritic sediments to form. The generally fine grained siliciclastic-biosiliceous sediments accumulated in a nearshore, shallow-water setting, around numerous islands, and offshore from a warm-temperate, rainforest-covered upland. Sponges compose a lithistid-hexactinellid assemblage of Mesozoic Tethyan affinity, confined to deep water in the modern ocean, that migrated into neritic paleoenvironments during late Eocene time. Lithistids dominated shoreface environments and were reworked into sponge-conglomerate beaches, while hexactinellids flourished offshore in muddy subshoreface environments. These deposits also contain common soft demosponge spicules, and a rare but otherwise normal marine calcareous biota. The biosiliceous sediments grade offshore into bryozoan-rich marls and limestones. Sponges outcompeted the calcareous benthos in these inner shelf environments because of elevated amounts of land-derived nutrients that included high dissolved silica and a calm hydrodynamic setting. These deposits suggest that neither temperature nor water depth are critical factors for prolific sponge colonization. The rarity of such deposits in the rock record likely reflects the necessity for the coincidence of all of these factors, or they are misinterpreted.