The courtship ritual of the alpaca is very unique. The females are induced ovulators, meaning there are no heat cycles, and that they can and do breed any time of the year. This is the main reason why most alpaca breeders will maintain separate male and female herds, that is, to maintain control over who breeds with whom, and when. Another thing that induced ovulation means is that it takes the physical act of breeding to cause ovulation to occur. Additionally, the female has a small cervix that is very difficult to penetrate. For these reasons, artificial insemination (AI) is virtually impossible. In the end, "it takes the boys to make the babies," thus preserving the value of high-quality studs.

There are two basic breeding methods available: pen breeding and pasture breeding. Pen (or "hand") breeding involves introducing the male to the female in a small, enclosed area for mating. If the female is not pregnant, she will eventually sit and allow herself to be mounted. The male makes a very distinctive "orgling" sound while they mate, which can last anywhere from about five minutes to about 30 minutes or more. The males do not ejaculate, per se; they are "dribble" inseminators, with a near-continuous stream of semen introduced to the female. Typically, the breeder will then reintroduce the same male/female pair to each other a few days later, and if the female has ovulated (and hopefully also conceived), she will not permit the male to breed with her.

Pasture (or "field") breeding is also a popular method of herd management. Under this system, an alpaca rancher pastures a single male with a group of females for a lengthy period of time (sometimes year-round).

The gestation period is 11 to 12 months. Females have single births almost always, and human intervention is rarely needed. The newborn (called a "cria" [kree’-ah]) weighs between 15 to 19 pounds, with delivery occurring almost always during daylight hours. The newborn cria is usually standing and nursing within 90 minutes of birth, and will continue to nurse for about five to six months until weaned. Twins are very rare, only about 1 in 10,000 births. The time between delivery and re-breeding for the mom is usually only between two to three weeks, so adult females basically spend their whole lives pregnant.

Shortly after birth, the cria is registered with the Alpaca Registry, Inc. (ARI). This is accomplished by submitting a small test-tube of the newborn’s blood to a testing laboratory at the University of California at Davis, along with a completed registration form that indicates the parentage of the newborn. The UC Davis lab does a DNA blood test comparison to ensure that the claimed lineage of a newborn is accurate. Once that occurs, the ARI administrative office in Montana issues a pedigree registration certificate to the animal’s owners. This documentation is extremely valuable, as it provides proof of ownership, as well as lineage back to the point of importation.

ARI itself is a tremendous asset to the entire alpaca community. Created in 1988 the ARI methodology and database are some of the most sophisticated of any livestock industry anywhere in the world. Virtually all of the alpacas in North America are registered with ARI. The registry protects the existing gene pool and helps ensure that each breeder’s investment is protected from crossbreeding with llamas, guanacos, or vicuñas. It also precludes the registration of an animal as an alpaca if, in fact, its parents were not registered alpacas.