There are few reported breeding and nesting details specific to the Rufous Motmot. Snow (2001) states that general breeding information is rather consistent among motmot species and thus likely applies to the Rufous Motmot as well. Members of the family nest in burrows excavated by both sexes in earthen banks working in alternating shifts. They can be as long as 3-5 m in larger species, are not necessarily straight, sometimes even having 90º bends in them if dug around unforeseen obstacles. Their feet are used to both loosen soil initially and gradually push it out of the burrow entrance where a mound of excavated dirt accumulates. Burrows often have two grooves in the dirt leading into the burrow resulting from traffic entering and exiting. Burrow entrances are usually wider than high and terminate in an oval-shaped nest chamber.
Motmot clutch size typically ranges from three to five eggs, with a range of two to six; but the clutch size for Rufous Motmot has not been reported. Eggs are white and nearly spherical in shape, incubated by both parents with nestlings fed by both parents as well. Nestlings lack down, growing feathers similar to adult feathers but duller in color a few days after hatching. There is no evidence of nest sanitation. Incubation, nestling and fledgling dependency periods remain unknown. Skutch (1971) describes what remains the only detailed account of nesting behavior of this species above the Rio Puerto Viejo at La Selva, Costa Rica, in June of 1967. He found a nest burrow obscured by a fallen tree that was apparently extended from an existing mammal burrow. The adults were observed carrying fruits, white arillate seeds and mangled insects and other invertebrates into the nest, always arriving at the nest separately. This nest failed after which the parents commenced lengthening the old burrow or digging a new tunnel off of the larger mammal den. One member of the pair waited outside the entrance while the other dug, sometimes calling, and each would kick loosened soil up the burrow and out of the entrance with alternate strokes of their feet. The outcome of the second nest was not known but another nesting occurred in the vicinity the next year providing evidence that one bird left the burrow early at dawn and was replaced by the other member of the pair until mid day when that individual was relieved of incubation duties until early the next day. This pair was feeding nestlings by 1 June 1968 although the final outcome of that nest was not reported.
Others have provided additional clues to nesting chronology. On 17 April 1971 a female with a fully developed egg in her oviduct was collected near Puerto Viejo, Costa Rica (Forshaw and Cooper 1987). Willis (1981) noticed pairs in Panama with muddy bills from 24 April to 21 August and individuals with clean bills from 9 May to 15 September suggesting extensive overlap of various stages of nesting activity. A pair was seen near Cerro Campana, central Panama, on 26 and 27 June carrying food away from an ant swarm (Forshaw and Cooper 1987).