We show and breed the chihuahua because we love and enjoy the breed, want to improve it
and provide people with healthy, well-socialized chihuahuas that are wonderful representations
of the breed.  However, there are many individuals out there that breed carelessly
and/or for profit only.  I urge anyone that is interested in acquiring a purebred to PLEASE go to a
reputable and ethical breeder. Here are some tips to remember:
 
A reputable breeder will:

Ask you questions:  Some may seem a bit personal, but remember: we love our dogs
and want them to go to the best homes possible.  We have done so very much more than
simply pairing a male and female.  If what is behind your prospective puppy does not concern
you, then perhaps a hamster or another short-lived pet might be best for you.  Fifteen years is a
long time to live with an unhealthy or mean dog.

Answer your questions:  He or she will be patient and willing to speak with you at a
time convenient to both parties.  If the breeder states that no genetic/hereditary problems have
ever plagued her lines, she is dishonest. 

Have nothing to hide:  The breeder should allow you to see his or her dogs and
where they are housed if seperate from the home.  The dogs should be clean, well kept, and
appear healthy. The house may not be spotless, but the dogs should be. If the house stinks of urine and feces, the dogs are covered in filth, the cages are disgusting - leave and leave quickly.

Stay in contact:  He or she will be available for questions or concerns throughout the dog's lifetime.  The breeder should also offer to take the dog back if ever the buyer cannot keep the dog. 
The breeder is forever responsible for the dog she created.

Preferably Exhibit their dogs:  

Breeders that show their dogs are adhering to the written standard for the breed and judging their dogs accordingly.  This means that a chihuahua will look like a chihuahua, and act like a chihuahua.  Breeders that do not show may not be very knowledgeable pertaining to the breed standard. There are exceptions of course, but if you want a chi that looks like a chi go to a show breeder.  On the other hand, if the show breeder is obviously more interested in ribbons and awards and her status than in her individual charges, seems uninterested in or brushes off your questions pertaining to potty training and other pet-related issues - go elsewhere.  Unfortunately, there are those breeder/exhibitors who are more interested in winning than the well-being of their dogs.
NOTE: Having been in the game a bit longer now, I must edit this to say that if looks do not matter, then by all means go to a breeder who doesn't show. However, understand that you may not end up with a lovely representation of the breed. Similarly, a new show breeder may not have established lines and their crosses may not be as typey as someone with more experience.
Regardless of your choice, the breeder should have a goal and a program and not just throw two dogs together. In my experience, very few breeders who do not show actually have type. Then again, I know of several show breeders who do not understand type but have the $$$to waste on showing poor type and eventually champion those dogs. As with everything, one must have an objective and learn as much as possible. Typically, you will get what you pay for. I am honest to a fault and have no problem answering questions about my dogs.

Contracts:  A contract outlining what is expected of both parties at the time of purchase and beyond.  Many breeders state that said pup should be seen by a veterinarian within a certain period after puppy is obtained/purchased.  Often general care is mentioned and what to expect if the dog becomes ill or dies or simply needs to be placed elsewhere.  A breeder SHOULD ALWAYS take back (not necessarily buy back) one of his or her dogs if the situation arises.   The very first brood bitch that I bought (rather hastily I might add) was found upon examination the following week to have two grade four luxating patellas.  This show breeder knew this and when I asked if I could return the bitch her answer was no. She wouldn't even take the bitch back for free.  That is a very unethical breeder and in my opinion, has no business breeding dogs. 
There should be a clause to this effect in the contract.  The breeder brought the dog into this
world and she should be responsible enough to take the dog back should the need arise.  Do not expect the breeder to buy back the dog.  Once a puppy grows up, unfortunately the monetary value is diminished unless the dog is of show quality. 

Stand Behind his or her dogs:  A good breeder will offer a refund or replacement
puppy should the puppy become ill, disabled, or die strictly due to a hereditary problem. 
Examples, hip dysplasia, crippling patellar luxation, hydrocephalus, epilepsy. This is an ethical breeder's worst nightmare and he or she should work with you and honor the contract. Do note however, that nutrition plays a very important role in proper development of all functions.  You should listen to the breeder and understand what has worked for her and do some homework of your own to determine the best way to feed your dog for optimum health.

Watch out for the following:

Again, ALL dogs deserve love.  That is without question.  The reason for this section is that too
many breeders breed "purebred" dogs with no attention to the breed standard.  This results in 
various terms used to describe dogs that are not much different than any dog you can find in a
shelter.  Terms such as "deer-head", "rare" (typically referring to colors that are rare for a
reason - such as blue which commonly comes with a condition known as "alopecia" and
results in hair loss and probable immune-related issues).  Most exhibitor/breeders stay
away from this color for that reason.  Now we have merle in chihuahuas,which I believe came
about due to the miniaturizing of the australian shepherd or possibly dachshund crosses.  A mix.  What is wrong with this? 
Breeding dogs should be a serious mission to preserve or better the breed.  Breeders that
intentionally breed chis that go against the standard are doing little more than breeding
glorified mongrels, which you can obtain from your local animal shelter. 
I recently received an email from one such breeder criticizing me for educating people about
the term teacup.  She uses the term.  It is not endorsed by reputable breeders, the CCA, or the
AKC.  I asked her why she used the term.  I received no answer.  Of course, the answer is money. 
I consider the term fraudulent because I have seen so many eight to ten pound chihuahuas
that were obtained from a "breeder" who sold them as teacups. 
And you better believe they paid for that term.  Quite possibly more than they would have paid a
responsible and ethical breeder/exhibitor for a lovely representative of our breed!
If they'd only done a bit more research.

Instead of patronizing these careless breeders, go to your local animal shelter as you will pay less for the same questionable "quality". 
If you really want a purebred chihuahua, do your homework or at the very least contact the breed club, the CCA for breeder referrals. 

Stay away from individuals offering the following:

- Rare colors or patterns for higher prices.

- Guarantee of adult size (not possible!)  An educated guess based on experience and one's lines is all you can offer new owners!  A guarantee is crazy and probably goes along with a "T-cup".  
Hmmm, perhaps I should start up a new type of chi for financial gain....nah, I'll stick to the
BREED STANDARD!

 - Teacups, short hair, long haired.  These terms are not used in our breed.  We have smooth coats and long coats.  Again, teacup is not a recognized term.  No knowledgeable breeder will use it. The term "full blooded" is also a sure sign of ignorance.  The proper term is purebred.

A NOTE ON MERLES:   There is much controversy over the merle pattern in chihuahuas.  I will not go into detail about the genes responsible or the problems such as blindness, deafness, that can occur from two copies of the merle gene. 
What I will say is that I believe that the merle pattern was created very recently by crossing the chihuahua with another breed that is known for carrying this pattern, such as the dachshund.  What this means is that the merle chihuahua is likely not a purebred. Sure, several breeds were used to create many of our breeds today but that is documented and approved and not some "oops" created by and hidden and lied about by a profit breeder.
The debate over merles has become such a nasty, hateful ordeal.  Although I have no interest in the pattern itself, I can understand that some breeders may like this look and want to incorporate it into their breeding program.  It doesn't really matter now how or when the merling gene came into our breed.   The CCA voted and the pattern is allowed.

So, bottom line, merle is now in our breed.  Period.  We can choose not to incorporate this pattern into our lines.  Some breeders are working with merle yet keeping it separate and DNA'ing their dogs accordingly.  I think this is the wisest action, but ultimately it is here regardless and non-merle breeders will need to be careful about using dogs from other breeders so as to prevent the hidden merle from entering their breeding program.  Responsible merle breeders are out there thankfully.  But the majority ARE pet breeders, puppy mills, back yard breeders and the like.  So be careful!  If the merle pattern chihuahua appeals to you, find a responsible and careful breeder who does DNA testing.  Here is a link to one such breeder.  She does DNA testing on all dogs as well as general health clearances.  Please note that by offering this link I am in no way advocating the breeding of merle chihuahuas, but it is out there and one's best bet is to find a breeder who is careful and responsible about breeding this pattern.

Puppy Mills:
A puppy mill does not have to be huge (but many are) to be a puppy mill.  These people offer
many breeds and likely sell to pet stores.  They breed for profit only and care nothing about the
dogs.  A person who breeds many breeds cannot possibly be taking the time necessary for
continual education, socializing the puppies, and they most certainly do not exhibit their dogs. 
These places are only breeding for profit, and do not care if their charges have health problems
or even if they resemble the breed.  Many dogs from such places will have issues with house
training, poor temperaments, and disease. 
Remember - a person who loves his or her dogs will NEVER, EVER place them in a pet store
to be sold.  And if they don't love them or care where they go, why would they care if they are sound?

Backyard Breeders:
A backyard breeder is a person that has a couple of chis and decides to breed them perhaps
for the fun of it or for the kids to see.  The dogs are probably not breeding quality, the people
know little about chihuahuas, and you will likely find their ad in the newspaper classifieds. 
Again, they usually know nothing about what is behind their dogs, whether they are sound,
or if they even look like chihuahuas.  While these folk are certainly not evil such as the puppy
millers and internet breeders, buying a puppy from BYB's is not recommended.