Breeding
Chao can mate naturally or you can make them. When Chao usually mate naturally they are about two or more years old, and they find another chao about the same age and in mating season. The way you can force them to mate is to give them a heart fruit which you can buy at the black market. You can tell when a chao wants to mate because he gets a ring of flowers around him and sits down.
Now that you've got the basics down lets dig a little deeper. The Black Market doesn't just sell Heart Fruits so you can watch Chao mate. The main reason people mate chao is to make Chao with better grades. Now it seems easy mate a chao with SSACS with another chao that has CCSSC and come out with a SSSSS, but know the Chao would actually turn out somewhat worse than its two parents. This is why if you mate a chao with a S in fly and you want it to stay fly you must mate it with another chao who has and S in fly.
If mating 2 normal chao, there is a 100% chance of getting a normal chao.
If you mate a normal chao and a monotone chao (chao that never changes color, usually bought from Black Market), there is a 25% chance of getting a normal chao, a 25% chance of getting a monotone chao (same color as parent monotone chao), a 25% chance of getting a Two-Tone Chao, and a 25% chance of getting a monotone normal chao.
If you mate a normal chao and a shiny chao, there is a 25% chance of getting a normal chao, a 25% chance of getting a shiny chao (same color as parent shiny chao), a 25% chance of getting a shiny two-tone chao, and a 25% chance of getting a Shiny Monotone Normal Chao.
If you mate a normal chao and a jewel chao, there is a 50% chance of getting a normal chao and a 50% chance of getting a jewel chao (same color as parent jewel chao).
If you mate 2 monotone chao, there is a 50% chance of a monotone chao (a color from one monotone parent) and there is a 50% chance of a monotone chao that is a different color than both parents.
If you mate 2 shiny chao, there is a 50% chance of a shiny chao that is a color from one shiny parent and there is a 50% chance of a shiny chao that is a different color than both parents.
If you mate a monotone chao and a shiny chao, there is a 25% chance of a monotone chao with a color from one of the parents, there is a 25% chance of a monotone chao that is a different color than both parents, there is a 25% chance of a shiny chao with a color from one of the parents, and there is a 25% chance of a shiny chao that is a different color than both parents.
If you mate a monotone chao and a jewel chao, there is a 50% chance of a monotone chao with the color of the monotone parent and there is a 50% chance of a jewel chao with the color of the jewel parent.
If you mate a shiny chao and a jewel chao, there is a 100% chance you will get an invisible chao or a translucent chao. Also, if you try mating a shiny normal chao (a normal chao that is shiny) with a jewel chao, there is only a 50% chance of getting an invisible or translucent chao.