This paper examines the fertility transition and its recent dynamics in Sri Lanka using data from Demographic and Health Surveys and Population Censuses. Fertility trends and patterns were analysed for two periods: 1953–2000 and 2000–2012. The findings revealed that Sri Lanka’s fertility transition has been relatively rapid and has taken place over a period of about four decades to reach replacement level. Social and health-related factors, including decline in maternal and infant mortality, increase in women’s education, changes in institutions, reproductive values and behaviour, and increased contraceptive use all contributed to bringing down the fertility level by 2000. However, in the 2006/07 Sri Lankan DHS and 2012 Population Census, a slight increase in Total Fertility Rate (TFR) to 2.3 and 2.4, respectively, was observed. Binary logistic regression estimates based on 2006/2007 DHS data were used to identify the significant predictors of fertility preferences of ever-married women. The analysis of factors affecting the likelihood of having a larger family (more than 2 children) revealed that lower educated women were more likely to have a higher number of children than their counterparts with a higher level of education. Women who lived in rural and estate (commercial area of 20 acres or more employing 10 or more labourers) sectors were 1.4 and 1.2 times, respectively, more likely to prefer more children compared with urban women. In terms of ethnic groups, Moor and Tamil women were 4.5 and 1.4 times, respectively, more likely to prefer more children than Sinhalese women. When the economic status of women was considered, the poorer women were 1.4 times more likely to desire a higher number of children compared with rich women, while women in the middle wealth quintile were 1.2 times more likely to desire more children. The findings suggest that the Sri Lankan government should re-visit population and reproductive health policy and family planning programmes to see how it can better manage fertility among the different population groups in Sri Lanka.