Desulfoluna spongiiphila strain AA1 is an organohalide respiring bacterium, isolated from the marine sponge Aplysina aerophoba, that can use brominated and iodinated phenols, in addition to sulfate and thiosulfate as terminal electron acceptors. The genome of Desulfoluna spongiiphila strain AA1 is approximately 6.5 Mb. Three putative reductive dehalogenase (rdhA) genes involved in respiratory metabolism of organohalides were identified within the sequence. Conserved motifs found in respiratory reductive dehalogenases (a twin arginine translocation signal sequence and two iron-sulfur clusters) were present in all three putative AA1 rdhA genes. Transcription of one of the three rdhA genes was significantly upregulated during respiration of 2,6-dibromophenol and sponge extracts. Strain AA1 appears to have the ability to synthesize cobalamin, the key cofactor of most characterized reductive dehalogenase enzymes. The genome contains genes involved in cobalamin synthesis and uptake and can grow without cobalamin supplementation. Identification of this target gene associated with debromination lays the foundation for understanding how dehalogenating bacteria control the fate of organohalide compounds in sponges and their role in a symbiotic organobromine cycle. In the sponge environment, D. spongiiphila strain AA1 may thus take advantage of both brominated compounds and sulfate as electron acceptors for respiration.