Paleoecological consequences of the global Triassic–Jurassic mass extinction (201.3 Ma) are poorly understood. Fossiliferous marine boundary records are rare, commonly condensed, and typically reveal facies changes previously attributed to eustacy. Sedimentology and biofacies analyses from stratigraphically expanded successions of the lowest Jurassic strata, New York Canyon, Nevada, were investigated with high-resolution paleoenvironmental observations, fossil surveys, and microfacies analysis. Following the collapse of the uppermost Triassic carbonate ramp, the lowest Jurassic Ferguson Hill Member of the Sunrise Formation records a midshelf habitat dominated by previously unrecognized siliceous sponges for approximately two million years. In addition, the earliest Jurassic strata from the Pucara Group, central Peruvian Andes, were examined and record a more greatly expanded stratigraphic succession of facies across the inner to middle shelf. Like Nevada, the lowest Jurassic Aramachay Formation is replete with intense concentrations of siliceous sponges. The revelation of widespread, ecologically dominant siliceous sponges has been overlooked despite detailed biofacies studies in both depositional systems. Sponges expanded across shallow environments with sparse benthic biocalcifier populations, and were likely aided by increased ocean silica concentrations from the weathering of the Central Atlantic Magmatic Province. Facies changes previously attributed to sea-level change are thus interpreted to result from the collapse of the carbonate factory concomitant with the mass extinction, with transition to an alternate state dominated by siliceous sponges before a return to carbonate platform development in the Sinemurian. Our study highlights the need to separate biofacies from paleoenvironmental analysis during mass extinction times when nonactualistic assemblages may dominate and deviate from expected environments (e.g., siliceous sponges as indicators of deep paleoenvironments).