In the spring, mature birds return to land, usually to the colony where they were hatched. Birds that were removed as chicks and released elsewhere were found to show fidelity to their point of liberation. They congregate for a few days on the sea in small groups offshore before returning to the cliff-top nesting sites. Each large puffin colony is divided into subcolonies by physical boundaries such as stands of bracken or gorse. Early arrivals take control of the best locations, the most desirable nesting sites being the densely packed burrows on grassy slopes just above the cliff edge where take-off is most easily accomplished. The birds are usually monogamous, but this is the result of their fidelity to their nesting sites rather than to their mates, and they often return to the same burrows year after year. Later arrivals at the colony may find that all the best nesting sites have already been taken, so are pushed towards the periphery, where they are in greater danger of predation. Younger birds may come ashore a month or more after the mature birds and find no remaining nesting sites. They do not breed until the following year, although if the ground cover surrounding the colony is cut back before these subadults arrive, the number of successfully nesting pairs may be increased.

Atlantic puffins are cautious when approaching the colony, and no bird likes to land in a location where other puffins are not already present. They make several circuits of the colony before alighting. On the ground, they spend much time preening, spreading oil from their preen gland, and setting each feather in its correct position with beak or claw. They also spend time standing by their burrow entrances and interacting with passing birds. Dominance is shown by an upright stance, with fluffed chest feathers and a cocked tail, an exaggerated slow walk, head jerking, and gaping. Submissive birds lower their heads and hold their bodies horizontally and scurry past dominant individuals. Birds normally signal their intention to take off by briefly lowering their bodies before running down the slope to gain momentum. If a bird is startled and takes off unexpectedly, panic can spread through the colony with all the birds launching themselves into the air and wheeling around in a great circle. The colony is at its most active in the evening, with birds standing outside their burrows, resting on the turf, or strolling around. Then, the slopes empty for the night as the birds fly out to sea to roost, often choosing to do so at fishing grounds ready for early-morning provisioning.

The puffins are energetic burrow engineers and repairers, so the grassy slopes may be undermined by a network of tunnels. This causes the turf to dry out in summer, vegetation to die, and dry soil to be whirled away by the wind. Burrows sometimes collapse, and humans may cause this to happen by walking incautiously across nesting slopes. A colony on Grassholm was lost through erosion when so little soil was left that burrows could not be made. New colonies are very unlikely to start up spontaneously because this gregarious bird only nests where others are already present. Nevertheless, the Audubon Society had success on Eastern Egg Rock Island in Maine, where, after a gap of 90 years, puffins were reintroduced and started breeding again. By 2011, over 120 pairs were nested on the small islet. On the Isle of May on the other side of the Atlantic, only five pairs of puffins were breeding in 1958, while 20 years later, 10,000 pairs were present.

Having spent the winter alone on the ocean, whether the Atlantic puffin meets its previous partner offshore or whether they encounter each other when they return to their nest of the previous year is unclear. On land, they soon set about improving and clearing out the burrow. Often, one stands outside the entrance while the other excavates, kicking out quantities of soil and grit that showers the partner standing outside. Some birds collect stems and fragments of dry grasses as nesting materials, but others do not bother. Sometimes, a beakful of materials is taken underground, only to be brought out again and discarded. Apart from nest-building, the other way in which the birds restore their bond is by billing. This is a practice in which the pair approaches each other, each wagging their heads from side to side, and then rattling their beaks together. This seems to be an important element of their courtship behaviour because it happens repeatedly, and the birds continue to the bill, to a lesser extent, throughout the breeding season.

Atlantic puffins are sexually mature at 4–5 years old. They are colonial nesters, excavating burrows on grassy clifftops or reusing existing holes, and on occasion may nest in crevices and among rocks and scree, in competition with other birds and animals for burrows. They can excavate their own hole or move into a pre-existing system dug by a rabbit, and have been known to peck and drive off the original occupant. Manx shearwaters also nest underground and often live in their own burrows alongside puffins, and their burrowing activities may break through into the puffin's living quarters, resulting in the loss of the egg. They are monogamous (mate for life) and give biparental care to their young. The male spends more time guarding and maintaining the nest, while the female is more involved in incubation and feeding the chick.

Egg-laying starts in April in more southerly colonies but seldom occurs before June in Greenland. The female lays a single white egg each year, but if this is lost early in the breeding season, another might be produced. Synchronous laying of eggs is found in Atlantic puffins in adjacent burrows. The egg is large compared to the size of the bird, averaging 61 mm (2+3⁄8 in) long by 42 mm (1+5⁄8 in) wide and weighing about 62 g (2+3⁄16 oz). The white shell is usually devoid of markings, but soon becomes covered with mud. The incubation responsibilities are shared by both parents. They each have two feather-free brood patches on their undersides, where an enhanced blood supply provides heat for the egg. The parent on incubation duty in the dark nest chamber spends much of its time asleep with its head tucked under its wing, occasionally emerging from the tunnel to flap dust out of its feathers or take a short flight down to the sea.

The total incubation time is around 39–45 days. From above ground level, the first evidence that hatching has taken place is the arrival of an adult with a beak-load of fish. For the first few days, the chick may be fed with this beak-to-beak, but later the fish are simply dropped on the floor of the nest beside the chick, which swallows them whole. The chick is covered in fluffy black down, its eyes are open, and it can stand as soon as it is hatched. Initially weighing about 42 g (1+1⁄2 oz), it grows at the rate of 10 g (3⁄8 oz) per day. Initially, one or the other parent broods it, but as its appetite increases, it is left alone for longer periods. Observations of a nest chamber have been made from an underground hide with a peephole. The chick sleeps much of the time between its parents' visits and also involves itself in bouts of exercise. It rearranges its nesting material, picks up and drops small stones, flaps its immature wings, pulls at protruding root ends, and pushes and strains against the unyielding wall of the burrow. It makes its way towards the entrance or along a side tunnel to defecate. The growing chick seems to anticipate the arrival of an adult, advancing along the burrow just before it arrives, but not emerging into the open air. It retreats to the nest chamber as the adult bird brings in its load of fish.

Hunting areas are often located 100 km (62 mi) or more offshore from the nest sites, although when feeding their young, the birds venture out only half that distance. Adults bringing fish to their chicks tend to arrive in groups. This is thought to benefit the bird by reducing kleptoparasitism by the Arctic skua, which harasses puffins until they drop their fish loads. Predation by the great skua (Catharacta skua) is also reduced by several birds arriving simultaneously.

In the Shetland Islands, sand eels (Ammodytes marinus) normally form at least 90% of the food fed to chicks. In years when the availability of sand eels was low, breeding success rates fell, with many chicks starving to death. In Norway, the herring (Clupea harengus) is the mainstay of the diet. When herring numbers dwindled, so did puffin numbers. In Labrador, the puffins seemed more flexible and when the staple forage fish capelin (Mallotus villosus) declined in availability, they were able to adapt and feed the chicks on other prey species.

The chicks take from 34 to 50 days to fledge, the period depending on the abundance of their food supply. In years of fish shortage, the whole colony may experience a longer fledgling period, but the normal range is 38 to 44 days, by which time chicks have reached about 75% of their mature body weight. The chick may come to the burrow entrance to defecate, but does not usually emerge into the open and seems to have an aversion to light until it is nearly fully fledged. Although the supply of fish by the adults reduces over the last few days spent in the nest, the chick is not abandoned as happens in the Manx shearwater. On occasions, an adult has been observed provisioning a nest even after the chick has departed. During the last few days underground, the chick sheds its down and the juvenile plumage is revealed. Its relatively small beak and its legs and feet are a dark colour, and it lacks the white facial patches of the adult. The chick finally leaves its nest at night, when the risk of predation is at its lowest. When the moment arrives, it emerges from the burrow, usually for the first time, and walks, runs, and flaps its way to the sea. It cannot fly properly yet, so descending a cliff is perilous; when it reaches the water, it paddles out to sea, and maybe 3 km (1.9 mi) away from the shore by daybreak. It does not congregate with others of its kind and does not return to land for 2–3 years.

Atlantic puffins are probably safer when out at sea, where the dangers are more often from below the water rather than above; puffins can sometimes be seen putting their heads underwater to peer around for predators. Seals have been known to kill puffins, and large fish may also do so. Most puffin colonies are on small islands, and this is no coincidence, as it avoids predation by ground-based mammals such as foxes, rats, stoats, weasels, cats, and dogs. When they come ashore, the birds are still at risk and the main threats come from the sky.

Aerial predators of the Atlantic puffin include the great black-backed gull (Larus marinus), the great skua (Stercorarius skua), and similar-sized species, which can catch a bird in flight, or attack one that is unable to escape fast enough on the ground. On detecting danger, puffins take off and fly down to the safety of the sea or retreat into their burrows, but if caught, they defend themselves vigorously with beaks and sharp claws. When the puffins are wheeling around beside the cliffs, a predator concentrating on a single bird becomes very difficult, while any individual isolated on the ground is at greater risk. Smaller gull species such as the herring gull (L. argentatus) and the lesser black-backed gull are hardly able to bring down a healthy adult puffin. They stride through the colony taking any eggs that have rolled towards burrow entrances or recently hatched chicks that have ventured too far toward the daylight. They also steal fish from puffins returning to feed their young. Where it nests on the tundra in the far north, the Arctic skua (Stercorarius parasiticus) is a terrestrial predator, but at lower latitudes, it is a specialised kleptoparasite, concentrating on auks and other seabirds. It harasses puffins while they are airborne, forcing them to drop their catch, which it then snatches up.

Both the guillemot tick Ixodes uriae and the flea Ornithopsylla laetitiae (probably originally a rabbit flea) have been recorded from the nests of puffins. Other fleas found on the birds include Ceratophyllus borealis, Ceratophyllus gallinae, Ceratophyllus garei, Ceratophyllus vagabunda, and the common rabbit flea Spilopsyllus cuniculi.

The Atlantic puffin has an extensive range that covers over 1,620,000 km (625,000 sq mi) and Europe, which holds more than 90% of the global population, is home to 4,770,000–5,780,000 pairs (equalling 9,550,000–11,600,000 adults). In 2015, the International Union for Conservation of Nature upgraded its status from "least concern" to "vulnerable". This was caused by a review that revealed a rapid and ongoing population decline in its European range. Trends elsewhere are unknown, although, in 2018, the total global population was estimated at 12–14 million adult individuals. Some of the causes of population decline may be increased predation by gulls and skuas, the introduction of rats, cats, dogs, and foxes onto some islands used for nesting, contamination by toxic residues, drowning in fishing nets, declining food supplies, and climate change. On the island of Lundy, the number of puffins decreased from 3,500 pairs in 1939 to 10 pairs in 2000. This was mainly due to the rats that had proliferated on the island and were eating eggs and young chicks. Following the elimination of the rats, populations were expected to recover, and in 2005, a juvenile was seen, believed to be the first chick raised on the island for 30 years. In 2018, BirdLife International reported that the Atlantic puffin was threatened with extinction.

Puffin numbers increased considerably in the late 20th century in the North Sea, including on the Isle of May and the Farne Islands, where numbers increased by about 10% per year. In the 2013 breeding season, nearly 40,000 pairs were recorded on the Farne Islands, a slight increase on the 2008 census and on the previous year's poor season, when some of the burrows flooded. This number is dwarfed by the Icelandic colonies with five million pairs breeding, the Atlantic puffin being the most populous bird on the island. In the Westman Islands, where about half Iceland's puffins breed, the birds were almost driven to extinction by overharvesting around 1900 and a 30-year ban on hunting was put in place. When stocks recovered, a different method of harvesting was used and now hunting is maintained at a sustainable level. Nevertheless, a further hunting ban covering the whole of Iceland was called for in 2011, although the puffin's lack of recent breeding success was being blamed on a diminution in food supply rather than overharvesting. Since 2000, a sharp population decline has been seen in Iceland, Norway, the Faroe Islands, and Greenland. A similar trend has been seen in the United Kingdom, where an increase in 1969–2000 appears to have been reversed. For example, the Fair Isle colony was estimated at 20,200 individuals in 1986, but it had been almost halved by 2012. Based on current trends, the European population will decline an estimated 50–79% between 2000 and 2065.

SOS Puffin is a conservation project at the Scottish Seabird Centre at North Berwick to save the puffins on islands in the Firth of Forth. Puffin numbers on the island of Craigleith, once one of the largest colonies in Scotland with 28,000 pairs, have declined dramatically to just a few thousand due to the invasion of a large introduced plant, the tree mallow (Lavatera arborea). This has spread across the island in dense thickets and prevents the puffins from finding suitable sites for burrowing and breeding. The project has the support of over 700 volunteers and progress has been made in cutting back the plants, with puffins returning in greater numbers to breed. Another conservation measure undertaken by the centre is to encourage motorists to check under their cars in late summer before driving off, as young puffins, disorientated by the street lights, may land in the town and take shelter underneath the vehicles.

Project Puffin is an effort initiated in 1973 by Stephen W. Kress of the National Audubon Society to restore Atlantic puffins to nesting islands in the Gulf of Maine. Eastern Egg Rock Island in Muscongus Bay, about 10 km (6 mi) from Pemaquid Point, had been occupied by nesting puffins until 1885, when the birds disappeared because of overhunting. Counting on the fact young puffins usually return to breed on the same island where they fledged, a team of biologists and volunteers translocated 10– to 14-day-old nestlings from Great Island in Newfoundland to Eastern Egg Rock. The young were placed into artificial sod burrows and fed with vitamin-fortified fish daily for about one month. Such yearly translocations took place until 1986, with 954 young puffins being moved in total. Each year before fledging, the young were individually tagged. The first adults returned to the island by 1977. Puffin decoys had been installed on the island to fool the puffins into thinking they were part of an established colony. This did not catch on at first, but in 1981, four pairs nested on the island. In 2014, 148 nesting pairs were counted on the island. In addition to demonstrating the feasibility of re-establishing a seabird colony, the project showed the usefulness of using decoys and eventually call recordings and mirrors, to facilitate such re-establishment.

Since the Atlantic puffin spends its winters on the open ocean, it is susceptible to human actions and catastrophes such as oil spills. Oiled plumage has a reduced ability to insulate and makes the bird more vulnerable to temperature fluctuations and less buoyant in the water. Many birds die, and others, while attempting to remove the oil by preening, ingest and inhale toxins. This leads to inflammation of the airways and gut and in the longer term, damage to the liver and kidneys. This trauma can contribute to a loss of reproductive success and harm to developing embryos. An oil spill occurring in winter, when the puffins are far out at sea, may affect them less than inshore birds as the crude oil slicks soon get broken up and dispersed by the churning of the waves. When oiled birds get washed up on beaches around Atlantic coasts, only about 1.5% of the dead auks are puffins, but many others may have died far from land and sunk. After the oil tanker Torrey Canyon shipwreck and oil spill in 1967, few dead puffins were recovered, but the number of puffins breeding in France the following year was reduced to 16% of its previous level.

The Atlantic puffin and other pelagic birds are excellent bioindicators of the environment, as they occupy a high trophic level. Heavy metals and other pollutants are concentrated through the food chain, and as fish are the primary food source for Atlantic puffins, the potential is great for them to bioaccumulate heavy metals such as mercury and arsenic. Measurements can be made on eggs, feathers, or internal organs, and beached bird surveys, accompanied by chemical analysis of feathers, can be effective indicators of marine pollution by lipophilic substances, as well as metals. In fact, these surveys can be used to provide evidence of the adverse effects of a particular pollutant, using fingerprinting techniques to provide evidence suitable for the prosecution of offenders.

Climate change may well affect populations of seabirds in the northern Atlantic. The most important demographic may be an increase in the sea surface temperature, which may have benefits for some northerly Atlantic puffin colonies. Breeding success depends on ample supplies of food at the time of maximum demand, as the chick grows. In northern Norway, the main food item fed to the chick is the young herring. The success of the newly hatched fish larvae during the previous year was governed by the water temperature, which controlled plankton abundance, and this, in turn, influenced the growth and survival of the first-year herring. The breeding success of Atlantic puffin colonies has been found to correlate in this way with the water surface temperatures of the previous year.

In Maine, on the other side of the Atlantic, shifting fish populations due to changes in sea temperature are being blamed for the lack of availability of the herring, which is the staple diet of the puffins in the area. Some adult birds have become emaciated and died. Others have been provisioning the nest with butterfish (Peprilus triacanthus), but these are often too large and deep-bodied for the chick to swallow, causing it to die from starvation. Maine is on the southerly edge of the bird's breeding range, and with changing weather patterns, this may be set to contract northwards.

Breeding colonies of Atlantic puffins provide an interesting spectacle for bird watchers and tourists. For example, 4000 puffins nest each year on islands off the coast of Maine, and visitors can view them from tour boats that operate during the summers. The Project Puffin Visitor Center in Rockland provides information on the birds and their lives, and on the other conservation projects being undertaken by the National Audubon Society, which runs the center. Views of the colony on Seal Island National Wildlife Refuge can be viewed via live cams during the breeding season. Similar tours operate in Iceland, the Hebrides, and Newfoundland.