The Upper Liassic series in the western border of Iberia (Lusitanian Basin, Portugal), show an important lutitic sedimentation, characterized generally by a monotonous marl/limestone alternation. Small scale siliceous sponge mudmounds occur in these deposits from Middle Toarcian to Lower Aalenian age. The scope of this work is to pinpoint the stratigraphical and sedimentological context and to characterize controlling factors of the spongioliths. Stratigraphic and facies analysis. Relevant sections were observed and investigated in different locations of the Lusitanian Basin (e.g., Alvaiazere, Porto de Mos, Rabacal, Coimbra and Cantanhede) (fig. 1). The siliceous sponge facies correspond to the upper part of the S. Giao Unit and to the lower part of the Povoa da Lomba Unit (fig. 2). Considering the sequential scheme of Duarte , the sediments correspond to groups of third-order depositional sequences MST3 and MST4 (mainly in the upper part of this sequence: MST4B). The sedimentary evolution of these units shows a stacking pattern composed of shallowing upward sequences deposited in an outer homoclinal ramp setting, dipping northwestwards. Both units increase in thickness from south to north (fig. 3) and their vertical facies associations correspond to a very bioturbated (Chondrites, Zoophycos, Planolites and Thalassinoides) marl/limestone succession (figs. 4 and 5). MST3 is demonstrably more marly than MST4B. The base of MST4 [MST4A in Duarte, 1997] corresponds to a marl/marly limestone alternation, very poor in siliceous sponge mudmounds. The first unit (MST3) which includes sponge mudmounds is dated as uppermost Bifrons zone through the base of the Bonarellii zone. The majority of the siliceous sponge mudmounds occur within this time slice. These mounds are characterized by a great diversity of accompanying fauna mainly composed of brachiopods (rhynchonellids and terebratulids), crinoids and bivalves. The initial growth of the sponge build-ups can be correlated basin-wide to the intra Bifrons regional flooding surface (MST2/MST3 boundary). The second unit (MST4), particularly its upper part (MST4B), corresponds to the top of the Meneghinni-Opalinum interval and is related to a carbonate progradational phase. In the eastern part of the basin, the calcareous facies of MST4B are more bioclastic. Siliceous sponge mudmounds. The Toarcian mudmounds of the Lusitanian Basin are usually only a few decimetres thick and most display irregular knob-like to flat lenticular morphologies. Some build-ups are round and can reach 1,5 metres in thickness and ten metres in diametre. Also worth mentioning is a siliceous sponge biostrome developed at the base of MST3 in the Porto de Mos section (figs. 3 and 6). The upper mound surface is normally rough and uneven. In both sequences they are always related laterally with carbonate beds, which corresponds to the top of fourth order sequences. The mudmounds consist of mostly brownish iron-rich calcified siliceous sponges and a greyish, sometimes peloidal allochthonous micritic matrix. In general, the sponges themselves consist of dense leiolitic microbolites [automicrites sensu Reitner and Neuweiler, 1993]. The sponge spicules are diagenetically transformed into calcite. The great majority of the sponge specimens belong to the Hexactinosa (Class Hexactinellida) and are unknown and undescribed to date. "Lithistides" (polyphyletic desma-bearing demosponges) are very rare and only occur as forms encrusting Hexactinosan sponges. The benthic macrofauna is abundant and consists of monospecific crinoids, rhynchonellids, terebratulids and bivalves (mainly pectinids and ostreids). Encrusting organisms are serpulids, bryozoans and foraminifera, as well as "Lithistids" mentioned above. They are entirely restricted to the stratonomical surfaces of the siliceous sponges. The sponge bioherms consist of several microfacies types (wackestones, packstones, floatstones and boundstones). All of them are micrite dominated and represent low energy environments. They differ mainly in the amount of siliceous sponges, micrite, microbialites and the accompanying fauna. Palaeoenvironmental significance. The amount of microbial induced carbonate clearly mirrors the importance of microbial activity in respect of the reef building potential. Furthermore, three other controlling factors played an important role in the initiation of the siliceous sponge mudmounds of the Lusitanian Basin: bathymetry, sea-floor morphology and sedimentation rate. The role of the first two factors is evident because the siliceous sponge mudmounds are particularly important (abundance and volumetric expression) in the eastern part of the basin (Rabacal-Alvaiazere region). They are practically absent towards the west (essentially in MST4B) where the series show hemipelagic sedimentologic features (figs. 7 and 8). Reduced sedimentation rate is a precondition for the settlement of siliceous sponges and Hexactinosa in particular. Compared to all other Toarcian sequential units, MST3 and MST4B are the thinnest and therefore reflect the lowest sedimentation rates (fig. 8).