The practice of having Ph.D. graduates employed by the university that trained them, commonly called “academic inbreeding,” has long been suspected to be damaging to scholarly practices and achievement. Despite this perception, existing work on academic inbreeding is scarce and mostly exploratory. Using data from Mexico, we find evidence that, first, academic inbreeding is associated with lower scholarly output. Second, the academically inbred faculty is relatively more centered on its own institution and less open to the rest of the scientific world. This navel-gazing tendency is a critical driver of its reduced scientific output when compared with noninbred faculties. Third, we reveal that academic inbreeding could be the result of an institutional practice, such that these faculty members contribute disproportionately more to teaching and outreach activities, which allows noninbred faculty members to dedicate themselves to the research endeavor. Thus, a limited presence of inbreds can benefit the research output of noninbreds and potentially the whole university, but a dominantly inbred environment will stifle productivity, even for noninbreds. Overall, our analysis suggests that administrators and policy makers in developing nations who aim to develop a thriving research environment should consider mechanisms to limit this practice.