Just below Goldenrod (Kogane) City is a house with an old man and woman inside. Talk to the man and he will take one of your Pokemon to level up and talk to the woman and she will do the same. It will cost 100 bucks to take them out, and 100 bucks per level up.

To breed Pokemon you must give the old man a Male Pokemon and give the old woman a Female Pokemon (or vice-versa) that have the same little icon or sprite. Or they must be compatible at breeding. Check our Pokedex for breeding compatibility.

Then exit the building and go walk around for a little while. Come back when you see the man standing outside with your two Pokemon. Talk to him and answer yes, he will give you an Egg.

If you put in Pokemon of different #'s, for example Pidgey and Hoothoot, the resulting egg will be the same species as the female Pokemon and with an Attack that the Male had. Just think of the strange combinations...

Put In a Male and Female Jigglypuff.

And get Igglybuff when you hatch the egg!

Note: Jigglypuff can be found outside in the grassy areas of Mt. Moon but is very rare.

And get Cleffa when you hatch the egg!

Put in a Male and Female Pikachu.

And get Pichu when you hatch the egg!

And get Magby when you hatch the egg!

Note: Magmar can be found inside the tower in Ecruteak (Enjyu) City where you fight your Rival.

Put in a Male and Female Electabuzz.

And get Elekid when you hatch the egg!

Note: Electabuzz can be found in the wild grass outside the Power Plant. Thanks to kapoeraskool for this information.

And get Smoochum when you hatch the egg!