Breeding of the Grey Petrel (Procellaria cinerea) was confirmed on Macquarie Island, with 26 colonies located, and unconfirmed nesting activity found at two additional localities. Colonies comprised from one to 12 burrows in which nesting was confirmed, with the total number of burrows in which nesting confirmed for all colonies combined ranging from eight in 2000 to 59 in 2003. The total number of active burrows with breeding not confirmed in all colonies combined ranged from 58 in 2001 to 54 in 2002 and 21 in 2003. The total number of fledged chicks ranged from six (2000) to 20 (2002), with a success rate of 75% in 2000 and 80% in 2002. Breeding success declined in 2003 to 32%. Factors accounting for nest failure are discussed. Colonies were located in Poa foliosa tussock grassland on steep seaward-facing (n = 26) or near-coastal slopes (n = 2) in deep soil with little surface rock. Five environmental variables determined colony location. Numbers of burrows increased with increasing depth of soils and on distinct spur-crests with a westerly aspect. Increased breeding success at higher altitude was related to decreased Black Rat activity. Uncertainty in our estimation of the size of the breeding population on Macquarie Island was caused by the high proportion of burrows in which breeding could not be confirmed. However, based on numbers of burrows for which nesting confirmed, a minimum breeding population of 59 pairs was present in 2003. If unconfirmed nesting burrows are included, the breeding population of Grey Petrels on Macquarie Island was probably 79 and 80 pairs in 2002 and 2003 respectively.