The timing of breeding is closely tied to the penguins and other seabirds which the sheathbills depend on. Sheathbills begin to occupy their territories in November on Signy Island, South Orkney Islands (Jones 1963). Ovogenesis occurs when eggs are available from penguins, and when the sheathbill eggs hatch the penguins are feeding their chicks (Forster 1996).
The nests of the sheathbill are cups with a diameter of 22-25 cm, and are "on top of untidy, smelly piles of tussock grass, moss, algae, feathers or old bones" (Forster 1996); Favero (1993) described the nest cups as composed of stones, penguin remiges, bones, and egg shells. Sheathbills prefer to nest in crevices between rocks or in cavities below rocks (Jones 1963), but may use other sites, such as in petrel burrows away from view. Both sexes participate in nest construction, although the male is more active in collecting nest material, and the female in arranging the nest material (Jones 1963).
The sheathbills lay their eggs in December. The clutch size is usually two or three eggs, but ranges from one to four. The eggs are pyriform, or pear-shaped, with a creamy white base color speckled with gray or brown. The eggs are laid at intervals of one-four days (Jones 1963). Full incubation begins after the clutch is complete (Jones 1963) and lasts 26-30 days (Favero 1993) or 28-32 days (Jones 1963). Both sexes incubate. The survival rate of the eggs ranges from 60-84%, and failure can be caused by infertility, predation by skuas or other sheathbills, flooding of nests, accidental breakage or eggs rolling out of nests. The hatching is asynchronous. First-hatched chicks therefore have a better chance of survival than younger ones and are always heavier.
Most sheathbills successfully raise one chick per season, and the type of penguin exploited does not affect breeding success (Forster 1996).
When the chicks hatch, they are semi-precocial and nidicolous, with dense brown down. This down is replaced by mottled gray mesoptile down after one to two weeks. White contour plumage appears after day 12, and by day 50, covers the chick. Chicks can move in the nest within a few hours of hatching, but they are still brooded by the parent continuously for the first two weeks, and less after that. Thirty days after hatching, the chicks wander away from the nest, and 55-60 days later they forage on their own, but still follow their parents for food for up to six months (Forster 1996).
The parents deliver billfulls of food to the nest, but they do not regurgitate it. Males and females contribute a similar amount of time to brooding and feeding chicks.
The age at first breeding is three to five years, but three year old sheathbills generally are unsuccessful.