In order for a breed to be established, inbreeding and line breeding are a must.  That is how certain traits are developed and carried on.  Chihuahuas are somewhat of a natural breed and the gene pool is really wide open.  That is why one can find so many Chihuahuas that look nothing alike except for the fact that they are the same breed.  Even though our breed standard may at first appear to be quite specific, it actually leaves quite a bit of room for interpretation.  Unlike Dobermans or Poodles, Chihuahuas do not have a universal "look", size or temperament.  A goal for most breeders is to establish a consistent "line".  That is, generations of dogs with similar enough traits that one could almost recognize the breeder when seeing the dog.

There is a tool to measure how inbred a dog called the "Inbreeding Coefficient". This percentage is based upon the fact that a dog inherits exactly 50% of its genes from each parent.  Littermates bred together would produce a dog with an IC of 50%.  Although there are various opinions on what the ideal IC% should be for the breed , the popular consensus seems to be a range of 15% to 20% for Chihuahuas and maybe a bit higher for Papillons.  Normally, that would be a composite result of generations of line breeding rather than immediate inbreeding.

There is often some question regarding  the term "inbred".  The major point to realize here is that the subject matter is a breed of dog whose mates are being chosen with thought and experience.  Humans mate for many reasons - almost none of them being the genetic implications of offspring resulting from the pairing. "Inbreeding" being associated with such a negative response is basically due to this factor.

When a breeder sets out to produce qualities in a dog or their line, they have to look at the genes involved in the dog and the dog's parents.  When improving on an animal, one intends to breed good qualities to good qualities and breeding a dog back to a relative will "lock in" those traits.  The same can be said with negative traits so one has to be careful and be honest and objective with all the traits a dog has to offer.  This is referred to as "line breeding".  Usually not littermates, or parent to child.  Genetic traits often skip generations or pair up differently so it makes much more sense to go back to grandparents or aunts and uncles.

When a breeder feels the need to add certain qualities to the line, they will often go to a dog that is unrelated.  This is referred to as "outcrossing".  This can be risky as the genes of the outside dog are literally an unknown factor now.  One may have two nearly identical dogs of different lines produce wildly different offspring because of the genes they are carrying, not just the obvious ones one can see.  Remember, gene inheritance is generally 50/50 so one cannot reliably predict the results of an outcrossing without in-depth knowledge of both lines and genetic heritability factors.

In short, inbreeding or line breeding does not automatically produce defects.  Doubling up on negative traits carried by dogs that are bred does, regardless of their relationship.

Let's face it, Chihuahuas are not large dogs.  As a result of being, in fact, the smallest breed of dog, they have small litters.  Although the puppies themselves are quite tiny, relatively they are fairly large.  Papillons aren't much bigger!  A human baby at 8 pounds is roughly 6% to 8% of its mothers' size.  A pound of Chihuahua newborns (about 4) can be 20% to 25% of momma's size!  Not only that, but compared to other larger breeds, the puppies are fewer and larger in comparison with the relative size between dam and pup.  The average litter size is only 3 puppies, 1 and 2 being common.  Toy Breeds in general are very similar this way and require a great deal more attention and time than people realize.  Frequently, these pregnancies end in Cesarean Sections - especially in the case of singletons.

It is by far safer to breed a bitch closer to 4 and 5 pounds than 3!  Puppies can only be so small before health is compromised.  A breeder could easily lose a  3 pound bitch trying to carry a litter of normal sized puppies.  Free whelping is heritable and is a big factor.  Just because a bitch is small does not necessarily preclude her from free whelping, her size simply increases the risk.  Conversely, a larger bitch carries no guarantees against C-Sections either.  There are so many other complications that arise - and frequently do - that it's impossible to include here without devoting the entire site to just breeding!

When a bitch is to be bred, it is best to have blood panels and tests run by your vet to ensure she is safe to breed.  An experienced, trusted breeder is probably the best person to turn to in evaluating whether to breed your bitch or not and to whom she is bred to.

As you can see, there is much more to breeding responsibly than putting two cute dogs together in order to ensure health and a long life.  Good breeding requires much study and some science.  There is also a modicum of morality and ethical behavior that is a MUST to keep one from becoming a backyard breeder or puppy mill.  Simply put, always keeping the quality and health of the animals at the top of the priority list; ensuring that each breeding is keeping not only within the Chihuahua standard but with a goal of improving each generation; and generally operating for the love of the animal rather than for monetary reasons.

Many breeders of Toy Breeds do not exactly go out and encourage others to become breeders for a variety of reasons, the primary one being that it takes a LOT of time (think 24 hour daycare for babies), a solid commitment, a huge heart with a tough hide, and quite a bit of money.  If you are interested in breeding toy dogs, talk to a breeder you trust and ask that person to mentor you.