All birds construct nests in which to lay eggs and/or raise offspring. Traditionally, it was thought that natural selection and the requirement to minimize the risk of predation determined the design of completed nests. However, it is becoming increasingly apparent that sexual selection also influences nest design. This is an important development as while species such as bowerbirds build structures that are extended phenotypic signals whose sole purpose is to attract a mate, nests contain eggs and/or offspring, thereby suggesting a direct trade-off between the conflicting requirements of natural and sexual selection. Nest design also varies adaptively in order to both minimize the detrimental effects of parasites and to create a suitable microclimate for parents and developing offspring in relation to predictable variation in environmental conditions. Our understanding of the design and function of birds' nests has increased considerably in recent years, and the evidence suggests that nests have four nonmutually exclusive functions. Consequently, we conclude that the design of birds' nests is far more sophisticated than previously realized and that nests are multifunctional structures that have important fitness consequences for the builder/s.