Photon breeding in relativistic jets involves multiplication of high-energy photons propagating from the jet to the external environment and back with the conversion into electron-positron pairs. The exponential growth of the energy density of these photons is a super-critical process powered by the bulk energy of the jet. The efficient deceleration of the jet outer layers creates a structured jet morphology with the fast spine and slow sheath. In initially fast and high-power jets even the spine can be decelerated efficiently leading to very high radiative efficiencies of conversion of the jet bulk energy into radiation. The decelerating, structured jets have angular distribution of radiation significantly broader than that predicted by a simple blob model with a constant Lorentz factor. This reconciles the discrepancy between the high Doppler factors determined by the fits to the spectra of TeV blazars and the low apparent velocities observed at VLBI scales as well as the low jet Lorentz factors required by the observed statistics and luminosity ratio of Fanaroff-Riley I radio galaxies and BL Lac objects. Photon breeding produces a population of high-energy leptons in agreement with the constraints on the electron injection function required by spectral fits of the TeV blazars. Relativistic pairs created outside the jet and emitting gamma-rays by inverse Compton process might explain the relatively high level of the TeV emission from the misaligned jet in the radio galaxies. The mechanism reproduces basic spectral features observed in blazars including the blazar sequence (shift of the spectral peaks towards lower energies with increasing luminosity). The mechanism is very robust and can operate in various environments characterised by the high photon density.
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