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Availability of suitable substratum is often a limiting factor for sessile organisms. We studied growth and regeneration of golf ball sponge Cinachyrella cf. cavernosa with and without its aggressive neighbour, soft coral (Zoanthus sansibaricus) in rocky intertidal area of Anjuna (Goa), India to understand impact of spatial competition on these life-history processes. Specific growth rate of C. cf. cavernosa ranged from 3.38 ± 0.47 to 24.57 ± 1.99% year−1. A wound-healing experiment demonstrated 50–100 times faster regeneration, compared to their average growth rate. Both growth and regeneration decreased as sponge size increased. The sponges exhibited 36–69% higher growth and 30–76% faster regeneration rate in the absence of the competitor species, Z. sansibaricus. The protein synthesis ability (RNA to DNA ratio), which is an index for physiological activity was adversely affected by sponge size and competitor abundance. Results suggest that in a space-limited region, the presence of an aggressive neighbour acts as one of the crucial factors affecting the primary functions (such as growth and regeneration) of the sponge. This study also highlights the remarkable regenerative ability of the slow growing sponge C. cf. cavernosa which aids in maintaining its abundance under stressful conditions of rocky intertidal region.