The straight-billed reedhaunter (Limnoctites rectirostris) is an ovenbird limited to southern South America that lives only in swales where the spiny apiaceous herb caraguatá (Eryngium pandanifolium) is abundant. Information on the biology of this globally near-threatened species with a decreasing population was unavailable or based on extremely few data. We aimed to study its breeding biology including season chronology, characterization of nests, eggs, nestlings, and general behavior; estimate nest survival through modelling; identify potential causes of nesting failure (additionally recording predators with camera traps), and test temporal and ecological variables associated with the daily survival rate. We monitored 85 nests during three breeding seasons (2012–2013, 2015–2016, and 2016–2017) and ~ 430 days of fieldwork in southern Brazil. The breeding season lasts from August to January (~ 160 days), with a peak of activity in the first week of December, related to the lengthening days. The mean (± SD) times for nest building, incubation, and caring for nestlings were 6.2 ± 1.3, 17 ± 1.2, and 16.4 ± 0.9 days, respectively. The rate of egg hatching was 78% and the production of fledglings was 22%. Nest survival was 10.5%, one of the lowest rates ever recorded for a Neotropical bird. Two variables, nest height and support plant height, are related to the success of the nests (Akaike information criterion–AICc = 292.958). We identified the guahiba gracile opossum Cryptonanus guahybae as the main nest predator. We also record evidence of nest predation by the green racer Philodryas olfersii (colubrid snake) and the pampas fox Lycalopex gymnocercus. The opossum extensively uses the straight-billed reedhaunter’s nests for shelter, representing a novel case of association negatively affecting the reproduction of the birds. It corroborates other studies which suggested that small marsupials are important nest predators in the tropics. The fact that predation occurs mainly in the egg phase by a small nocturnal opossum leads us to refute the Skutch hypothesis, which assumes higher predation rates during the most active phases of the nest (nestling phase). We argue that the observed low nest survival deserves attention from conservation planners because it can be considered together with the small range size and particular habitat requirements currently known in future assessments of the conservation status of the straight-billed reedhaunter. Finally, our findings are the first step to better understanding the life history of this species and to elaborate new predictions related to ecological, behavioral, and conservation issues.