Data on 2,355 married women from the 2006 China Health and Nutrition Survey are used to study how female employment affects fertility in China. China has deep concerns with both population size and female employment, so the relationship between the two should be better understood. Causality flows in both directions. A conceptual model shows how employment prospects affect fertility. Then a well-validated instrumental variable isolates this effect. Female employment reduces a married woman’s preferred number of children by 0.35 on average and her actual number by 0.50. Ramifications for China’s one-child policy are discussed.