Bangladesh has been passing through a crucial phase of fertility transition. The level of fertility declined dramatically during the early 1990s without any remarkable improvement in socioeconomic and health status, and then remained constant at a high level of 3·3, despite the increased use of contraception. Such fertility transition can be traced to variations in one or more of the proximate or direct determinants of fertility. This paper critically analyses the fertility levels in Bangladesh with a view to exploring the possible explanations of fertility decline in the 1990s and then its stabilization. The main focus of the study is to examine the role of the major proximate determinants of fertility in bringing about the change in fertility level in Bangladesh. The data for the study come from a series of nationally representative surveys over the period of 1975 to 1999–2000. The analysis indicates that fertility has temporarily ceased to decline in recent years due to the ‘tempo’ effect of high past fertility, but in general a declining trend in fertility is underway. The analysis suggests that the fall in fertility is consistent with the underlying trends in most important proximate determinants of fertility. In recent years contraception has emerged as the highest fertility reducing factor in Bangladesh and its effect is greatest in middle and older age groups. Although until the early 1990s postpartum lactational infecundability was the most important and strongest fertility reducing factor in Bangladesh, in recent years its fertility inhibiting effect has gradually decreasing owing to the declining trend in the lactational infecundability period. The analysis reveals that although the fertility reducing effect of the marriage pattern is increasing, its effect is offset by the declining trend in the lactational infecundability period. A review of these two variables suggests that their effect cannot be raised much for prevailing socioeconomic and cultural reasons, and any future reduction in fertility in Bangladesh may be largely dependent on increased use of effective birth control methods.