The Central Statistics Office (CSO) said 64,237 babies were born during the year with 27,479 deaths recorded, the highest natural increase in population since 1982.
The small country for years suffered an exodus of its young people, but a decade-long "Celtic Tiger" economic boom has drawn people back as well as attracting a wave of immigrant workers, notably from eastern Europe.
Prime Minister Bertie Ahern was re-elected for a third straight term this year despite signs of a slowdown.
In 2006 the number of births was 3,195 more than the 2005 figure which the CSO says can largely be explained by a corresponding increase in the female population of child-bearing age.
There was also a small rise in the average fertility rate which was 1.9 children per woman in 2006.
Over a third of the babies were born outside marriage in the mainly Roman Catholic country.
The highest percentage of births outside marriage was almost two-thirds in Limerick city in the south-west of the country.
There were 21,841 marriages registered last year, 486 more than in 2005, and the courts granted 3,466 divorces.