For-profit breeding on a smaller scale is sometimes referred to as backyard breeding.

The American and Westminster kennel clubs state that responsible breeders raise their animals with the intent to produce healthy dogs, and to ensure that all animals are provided responsible homes and socialization.

In puppy mills, females are sometimes bred every time they are in heat to increase profits, resulting in gradually decreasing sizes of litters. As puppies, mill dogs are also often weaned from their mothers well before the eight to ten weeks recommended. Dogs in puppy mills are often bred indiscriminately. While the puppies produced may come with pedigrees, the pedigree itself is neither an indication of quality nor authenticity. Pet stores selling these dogs may be unaware of breeding conditions. The American Kennel Club is by law not held responsible nor do they guarantee the health of the dogs they sell.

Due to the frequently poor breeding conditions in puppy mills, puppies bred there often suffer from health and/or social problems. Puppies raised in a cramped environment shared by many other dogs become poorly socialized to other dogs and to humans. Dogs are then transported over long distances in poor conditions, sometimes resulting in animal stress and death. As the surviving mill dogs grow older, they are more prone to developing respiratory ailments and pneumonia, as well as hereditary defects such as hip dysplasia. In addition, mill dogs are more prone to have problems with their temperament. Puppies from mills are usually sold as purebred dogs in an attempt to attract the higher prices associated with purebreds. However, due to the indiscriminate breeding practices of puppy mills, the dog may not actually be a purebred puppy. The vast majority of puppy mill animals are sold to pet stores by "dealers". Some puppies are sold by dealers masquerading as authentic breeders.

According to Canis Major V. publications, puppy mills originated in the post-World War II era. Midwestern farmers looking for an alternative crop reacted to a growing demand for puppies, resulting in the development of the first commercial puppy business. As the business grew, both small and large retail outlets began to sell puppies through pet departments. At around the same time, the first pet store chains were born.

Through indifference or ignorance, many puppies were left unsocialized or exposed in existing chicken coops or rabbit hutches. In addition, veterinary care for these puppies was often overlooked because of an inability to pay. As a result, organizations such as the Humane Society of the United States began to investigate breeding kennels, leading to the passage of the Animal Welfare Act of August 24, 1966.

According to the Humane Society of the United States, thousands of puppy mills are located around the country. A high concentration of both puppy mills and breeders has been reported to be in the states of Pennsylvania, Arkansas, Kansas, Nebraska and Missouri.

The term "puppy mill" has been widely used by animal rights groups in protests against breeders who have substandard breeding conditions. Such breeders, sometimes labeled hobby breeders, are often cited by animal rights groups as puppy mills. Hobby breeders claim that emotional rhetoric, sensationalism, and pictures of dirty kennels are used to justify additional legislation or additional restrictive licensing that travels well beyond the initial goal of removing dogs from truly deplorable conditions.

Some hobby breeders argue that many attempts to legislate puppy mills would put them out of business. Many hobby breeders argue the laws, which often require extra paperwork and inspections, would be more of a nuisance than help in shutting down puppy mills. Such breeders often cite existing lemon laws for puppies as sufficient protection for both dogs and prospective buyers.

On May 29, 2008, MSNBC aired a report about puppy mills, in which talk show host Oprah Winfrey revealed an industry fraught with problems and apparent cruelty. The broadcast showed puppy mills with small cages, with chicken wire floors, stacked in rows from floor to ceiling, and stated that many dogs spend their entire lives within these tiny cages. Many of these dogs are sold on the internet or by pet retailers to buyers who are unaware of the dogs' backgrounds. The report claimed that customers who object to this treatment of puppies unknowingly allow the industry to thrive.[clarification needed] It also pointed out that many of the puppy mill bred dogs suffer long-term health problems.