When reproducing sexually, P. phyllanthus individuals grow a white seta (stalk) from the base of the thallus upon which bears a single black capsule holding millions of tiny spores for reproduction.

The species can often be confused with Symphyogyna or Pallavicinia;[2] the difference is that P. phyllanthus does not branch as often as Symphyogna and has undulate margins without teeth.

[3] Sperm from the male reproductive organ (antheridium) travel through an aqueous environment to fertilise the eggs held in the female reproductive organ (archegonium); consequently the species are dependent on moist environments.

The sporophyte generation develops from this diploid embryo and forms a sporangium at its apex; the capsule.

[3] Liverworts can also reproduce asexually via gemma cups, which disperse clones of the parent via water droplets.