We studied the effects of colony size on individual reproductive success in a multi-site population of Black-headed Gulls where colony size ranged from 10 to 5,000 pairs. By focusing on family size, the number of chicks attended by individually marked parents, and accounting for between-individual variation, we detected a negative colony-size effect during the very first days of life of the chicks that was compensated by a subsequent increase in the proportion of surviving chicks with colony size. We suggest that this result originates in the interplay between overcrowding costs acting on hatching success, and benefits of colonial breeding, most probably more efficient food-searching (foraging enhancement), acting on chick survival. However, the frequency of complete colony failure increased with decreasing colony size. Taking this hazard risk into account yielded a corrected estimate of the effect of colony size on breeding success, and indicated that the largest colonies were the most productive. This pattern is congruent with the previous finding that larger colonies are more attractive to dispersing breeders.