Phosphonates are characterized by a stable carbon-phosphorus bond and commonly occur as lipid conjugates in invertebrate cell membranes. Phosphonoacetate hydrolase encoded by the phnA gene, catalyses the cleavage of phosphonoacetate to acetate and phosphate. In this study, we demonstrate the unusually high phnA diversity in coral-associated bacteria. The holobiont of eight coral species tested positive when screened for phnA using degenerate primers. In two soft coral species, Sinularia and Discosoma, sequencing of the phnA gene showed 13 distinct groups on the basis of 90% sequence identity across 100% of the sequence. A total of 16 bacterial taxa capable of using phosphonoacetate as the sole carbon and phosphorus source were isolated; 8 of which had a phnA+ genotype. This study enhances our understanding of the wide taxonomic and environmental distribution of phnA, and highlights the importance of phosphonates in marine ecosystems.