The recent publication of a chromosomal-level assembly of the genome of the freshwater sponge, Ephydatia muelleri, increases the utility of this species as a non-bilaterian model. In addition to its role in helping us understand early animal evolution and freshwater adaptations, E. muelleri provides an opportunity to study the evolutionary origins and ecological persistence of endosymbiosis. In many freshwater habitats, green algae form intracellular symbioses with a variety of heterotrophic host taxa including several species of freshwater sponge like E. muelleri. We examined the association between E. muelleri and its chlorophyte partner to identify features of host cellular and genetic responses to the presence of intracellular algal partners. Chlorella-like green algal symbionts were isolated from field-collected adult E. muelleri tissue harboring algae. The sponge-derived algae were successfully cultured and subsequently used to reinfect aposymbiotic E. muelleri tissue. We used confocal microscopy to follow the fate of the sponge-derived algae after inoculating algae-free E. muelleri to show temporal patterns of symbiont location within host tissue. We also infected aposymbiotic E. muelleri with sponge-derived algae, and performed RNASeq to study differential expression patterns in the host relative to symbiotic states. Our work demonstrates that freshwater sponges offer many tractable qualities to study features of intracellular occupancy and thus meet criteria desired for a model system and opens avenues to uncover possible conserved evolutionary pathways that may lead to stable mutualistic endosymbioses.