The Collared Flycatcher is a hole nester. The nest is built in a natural tree cavity, an old woodpecker hole or a nest box. The male arrives before the female and holds a territory around suitable nest holes. The female usually lays 5–7 eggs, which are incubated for about 13 days. Both parents feed the young, which leave the nest after about 16–17 days. On Öland and Gotland the species occurs locally alongside the European Pied Flycatcher, and the two species can sometimes hybridise.