Only monogamous pairs have been documented. Females select the nest site, which is usually a cavity in a dead or live tree. Nest boxes, along with already built and abandoned nest sites, are preferred. Cavities are usually 4-15 feet off the ground. Between 7 and 15 eggs are laid shortly after the nest is completed.
Incubation begins after all the eggs have been laid.
The male abandons the female shortly after this point. Although the Hooded Merganser is mostly aquatic and awkward on land, females lead their ducklings up to 1.2 km across land from inland nests in order to reach water. Hooded Mergansers are clumsy, but quick, flyers. They take off by running on water, and they have a ceaseless and rapid wingbeat during flight. They land at high speeds and are often seen 'skiing' across the water to come to a stop.