Step One: Acquiring a Ranch Block
You can make a Ranch Block by putting a flower pot, PC, and piston in the crafting table. Then, you are able to place the Ranch Block down- make sure you have a 9x9 area cleared out around it; or, if you put a Ranch Upgrade on it, the area will be extended by 1x1, up to a maximum of 15x15.
*Note, if you put the Ranch Block underground, your Pokemon will not be visible, but they will still breed.

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-Ranch Block recipe.


Step Two: Putting Pokemon in the Ranch Block.
You will need to have two Pokemon that are compatible with each other to produce an egg. (You can see which egg group each of the Pokemon fall into on the wiki; just look up said Pokemon) ie; Milotic and Swablu can both breed together and produce and egg, because they are both apart of the Dragon egg group. A lot of the Pokemon are apart of more than one egg group. If they are apart of the Undiscovered egg group, however, they may not breed with any Pokemon. If the Pokemon does not have a gender, and is not apart of the Undiscovered group, you will need a Ditto to breed with them, ie; Staryu, or Porygon.
You can see each egg group here: http://pixelmonmod.com/wiki/index.php?title=Category:Egg_Groups
Keep in mind that some Pokemon can not breed at all, some of those Pokemon are, but are not limited to, Nidorina, Nidoqueen, any of the baby Pokemon (Pichu, Magby, Riolu, etc) or Unown. (http://pixelmonmod.com/wiki/index.php?title=Undiscovered is a list of each Pokemon that can not breed)
*Note that Legendary Pokemon can not breed, not even with a Ditto. The only exception of this is Manaphy and Phione, who will always produce a Phione egg. (Currently, they are not in Pixelmon though, so no Legendary breeding.)
*Note that if you breed two ditto's together, they will produce a completely random Pokemon egg, however, this has been disabled on PokeClash.
*Note that if you breed NidoranF and NiroranM, it is random on which gender you get.
*Note that if you breed Illumise or Volbeat, you will get either or from breeding.
*Note that the female gender is (mother), and the male gender is (father)

Step Three: Knowing your Pokemon's Environment
You need to allow the Pokemon to feel at home, in their environment for them to produce an egg. Each typing likes specific blocks, and each of those blocks are numbered from 1, to 4. 1 being the lowest amount of like, and 4 being the highest. The higher the number is, the more they will want to breed, and in turn, have a higher chance of producing an egg.
Each typing, and what they like block wise can be found here: http://pixelmonmod.com/wiki/index.php?title=Breeding/Environment
If the Pokemon is dual typing, you only need to put one of the typings blocks down, but if you are breeding, say, Eevee and Espeon, you will need to put blocks that Normal types like, and that Psychic types like. If you only include one of the typings, (Having only fence, or cake- that only the Normal type Eevee would like, and not having anything for Espeon) will result in Espeon being too out of place to breed, and therefore, no eggs will be produced.
Hearts will appear above the Pokemon's heads when they are happy with the environment they are in. (Larger Pokemon may have this heart covered by it's model.) You can measure how much the Pokemon love each other by these. A red heart is required for the Pokemon to start to produce eggs.
To see how long it will take for your Pokemon to produce an egg, you can click on them, and depending on how much they like the environment, it will say different messages.
""Pokémon 1 has no one to fall in love with!"" Means that the Pokemon does not have any partner in the ranch block; only one Pokemon is in there.
"Pokémon 1 doesn't get along well with anyone here!"" means there are no suitable Pokemon that it can breed with.
""Pokémon 1 has a crush on Pokémon 2, but doesn't feel comfortable in this environment!"" Means the Pokemon does not like the environment.
""Pokemon 1 likes Pokémon 2 a tiny bit more every day!"" Means that the Pokemon has a suitable environment, but it could be better; They will produce an egg every 2 hours, 30 minutes.
""Pokémon 1 is more attracted to Pokémon 2 every day!"" Means that the Pokemon has a suitible enviroment, but it could be better; They will produce an egg every 1 hour, 15 minutes.
""Pokémon 1's love for Pokémon 2 grows rapidly every day!"" Means that the Pokemon has a suitible enviroment, but it could be a tad better. They will produce an egg every 50 minutes.
""Pokémon 1 falls madly in love with Pokémon 2 every single day!"" Means that the Pokemon has the best enviroment, and loves it. They will produce an egg every 37 minutes.

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-Eevee with cake surrounding the Ranch Block, *Cake are the most favourited of Normal Type Pokemon

(You can use Isi's Silver Hourglass or Isi's Golden Hourglass to speed this process up, and they will automatically produce an egg, consuming the item in the process;
http://pixelmonmod.com/wiki/index.php?title=Isi%27s_Golden_Hourglass
http://pixelmonmod.com/wiki/index.php?title=Isi%27s_silver_hourglass)
*Note the Ranch Block will take the highest block (up to a limit of 3) into consideration, so if you place a fence over grass, the Ranch Block will pick up the fence, and will not take into consideration the grass under it; if you stare at the ranch block for a few seconds, squares will pop up on the ground, that is what it is taking into consideration.
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-Notice how the square is atop the Black Wool block, instead of the cake, underneath.

Step Four: Knowing Your Items
Slowly, your Pokemon will start to breed eggs that produce higher IV's, and you will need to switch the parent out for the egg that has the higher IV's. You can give your Pokemon items that will help it with the breeding.
Giving your Pokemon an Everstone will guarantee the Nature of the Pokemon holding it to be passed down to it's offspring. (If you give it to your Eevee, with a Rash nature, every Eevee you breed will have that nature.)
Giving your Pokemon a Destiny Knot will ensure that, instead of 3 IV's passed down from the parents, they will pass down 5, instead. The IV's are random, so perhaps the mother will pass down Health, Special Attack, and Speed, and the father will pass down Attack, and Special Defense, leaving the Defense IV to be random. It changes every time, so each time you get an egg, will be different.
Giving your Pokemon any Power Items will allow the Pokemon to pass down the IV that the Item would give, if you were EV training them.
Power Weight will pass down HP,
Power Bracer will pass down Attack,
Power Belt will pass down Defense,
Power Lens will pass down Special Attack,
Power Band will pass down Special Defense,
Power Anklet will pass down Speed,
(Ie; If you give your 31/5/15/21/17/5 Eevee the Power Weight, each offspring will 100% have 31 in HP.)

There are also other items that determine which Pokemon will hatch from the egg; ie, if you give a Snorlax a Full Incense, the egg will be a Munchlax, instead of a Snorlax.
(More info on that, here: http://pixelmonmod.com/wiki/index.php?title=Incense ; Full Incense for Munchlax, Lax Incense for Wynaut, Luck Incense for Happiniy, Pure Incense for Chingling, Rock Incense for Bonsly, Rose Incense for Budew, Sea Incense for Azumarill, and Wave Incense for Mantyke.)

Other Things That You May Want To Know;

Pokeballs:
The ball that the mother is in will be passed down to the offspring (If you have your female in a Poke-ball, and your father in a Great-ball, the offpsring will be a Poke-ball) Unless the fathers ball is a Master ball or Cherish ball, it can not be passed down.

Growth:
The growth of the two Pokemon matter too. You may only get a microscopic Pokemon by breeding two runt's, or you may only get an ginormous Pokemon by breeding two enormous Pokemon; but it is only a 1/3 chance that the offspring will be either microscopic or ginormous. (You can not get a pygmy Pokemon by breeding two giant Pokemon, but they may produce either Enormous, or Huge.
(The sizing goes Microsophic, Pygmy, Runt, Small, Ordinary, Huge, Giant, Enormous, Ginormous.)

Ability:
The female Pokemon has an 80% chance on passing down her ability to the offspring, the male does not have any chance. (If the female Eevee has Runaway, there is an 80% chance the offspring will also have Runaway, instead of Adaptability.)
If the Pokemon is breeding with a Ditto, if it is a male, it will have a 60% of passing it down.
If neither parent has the hidden ability, the offspring will not have it, either.

Egg Moves:
Certain moves can be passed down to the offspring as well. (If you breed a Milotic with a Poliwag that knows Hypnosis, the offspring will also know Hypnosis.) If the father knows any TM's or HM's, the offspring will also know them, if the offspring is able to learn them by default.
Every egg move a Pokemon can learn can be found on their wiki page, some moves need to be chain bred to finally get to the Pokemon you wish to have the move, ie:
To get the move Wish on an Eevee, you will first need to breed a Skitty or a Pikachu with a Togetic that knows Wish, then from there, you will need to breed the offspring Skitty or Pikachu with the Eevee.
If you breed a Pikachu or Raichu holding a Light Ball, the offspring Pichu will know Volt Tackle.

Hatching your 'Mon:
Once you have gotten your egg, there are a number of ways to hatch it, you can use an AFK hatcher, (Putting Movement Plates in a square) or you can just run around with it in your party. If you have a Pokemon in your party with Flame Body, or Magma Armor, the egg will hatch twice as fast. Riding in a boat or a minecart will not count towards the steps needed to hatch the egg. Each Pokemon hatches at their own speed; ie, Ralts will hatch faster than an Eevee.

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An egg hatcher. *Fence on the side to quickly get your Pokemon's friendship higher.