Ever since Darwin’s early descriptions of coral reefs, scientists have debated how one of the world’s most productive and diverse ecosystems can thrive in the marine equivalent of a desert. It is an enigma how the flux of dissolved organic matter (DOM), the largest resource produced on reefs, is transferred to higher trophic levels. Here we show that sponges make DOM available to fauna by rapidly expelling filter cells as detritus that is subsequently consumed by reef fauna. This “sponge loop” was confirmed in aquarium and in situ food web experiments, using 13C- and 15N-enriched DOM. The DOM-sponge-fauna pathway explains why biological hot spots such as coral reefs persist in oligotrophic seas—the reef’s paradox—and has implications for reef ecosystem functioning and conservation strategies.