Nests and nesting behavior of the Nightingale Wren (Microcerculus marginatus) in Panama are described. Two nests were found at the ends of horizontal burrows in dirt banks, presumably excavated by other species. The nest chambers were lined with dead leaf fragments. Clutch sizes were two and three eggs. Incubation period was 19 or 20 days for one nest, and the nestling period was 16 or 17 days for the second nest. A comparison of nests in the Troglodytidae shows the nests of M. marginatus to be most similar to those of the genera Salpinctes, Catherpes, and Hylorchilus, all of which are secondary cavity nesters. If nest type is a phylogenetically conserved characteristic, then these four genera may be more closely related than is reflected in current classifications.