BACKGROUND: Fitness in birds has been shown to be negatively associated with anthropogenic noise, but the underlying mechanisms remain obscure. It is however crucial to understand the mechanisms of how urban noise impinges on fitness to obtain a better understanding of the role of chronic noise in urban ecology. Here, we examine three hypotheses on how noise might reduce reproductive output in passerine birds: (H1) by impairing mate choice, (H2) by reducing territory quality and (H3) by impeding chick development. METHODOLOGY/PRINCIPAL FINDINGS: We used long-term data from an island population of house sparrows, Passer domesticus, in which we can precisely estimate fitness. We found that nests in an area affected by the noise from large generators produced fewer young, of lower body mass, and fewer recruits, even when we corrected statistically for parental genetic quality using a cross-fostering set-up, supporting H3. Also, individual females provided their young with food less often when they bred in the noisy area compared to breeding attempts by the same females elsewhere. Furthermore, we show that females reacted flexibly to increased noise levels by adjusting their provisioning rate in the short term, which suggests that noise may be a causal factor that reduces reproductive output. We rejected H1 and H2 because nestbox occupancy, parental body mass, age and reproductive investment did not differ significantly between noisy and quiet areas. CONCLUSIONS/SIGNIFICANCE: OUR RESULTS SUGGEST A PREVIOUSLY UNDESCRIBED MECHANISM TO EXPLAIN HOW ENVIRONMENTAL NOISE CAN REDUCE FITNESS IN PASSERINE BIRDS: by acoustically masking parent-offspring communication. More importantly, using a cross-fostering set-up, our results demonstrate that birds breeding in a noisy environment experience significant fitness costs. Chronic noise is omnipresent around human habitation and may produces similar fitness consequences in a wide range of urban bird species.