Bluebirds often nest in bird houses. You can buy bluebird houses already built from gardening and bird feeding stores, or you can build your own. Plans for a bluebird box that is designed to attract bluebirds and to keep predators out from the Minnesota Department of Natural Resources:

• Carrol Henderson's Bluebird Box Plans page 1
• Carrol Henderson's Bluebird Box Plans page 2

• Try to provide a fence line, wires, or tree branches where bluebirds may perch to search for food.
• Avoid brushy and heavily wooded areas -- this is the habitat of the House Wren, which may puncture bluebird eggs.
• Avoid farmsteads and feedlots where House Sparrows may be abundant. They take over bluebird boxes, often killing the bluebirds.
• Avoid areas of heavy pesticide use.
• Boxes for the Eastern Bluebird should be spaced at least 100 to 150 yards apart; Western and Mountain Bluebirds have a larger nesting territory and boxes should be spaced no closer than 300 yards apart.

• House Sparrows: House sparrows aggressively take over bluebird nest boxes, often killing the bluebirds. It's important to check your houses at least once a week to throw out House Sparrow nests as they start. House Sparrow nests are tall, made of coarse grasses, often with pieces of scrap paper, cellophane, or other garbage. The nest forms a canopy with a tunnel-like entrance. Their eggs are cream-colored with brown markings. In comparison, bluebirds make a deep cup-shaped nest out of fine grasses or pine needles. Bluebird eggs are blue.
• Tree Swallows: You are not legally allowed to disturb Tree Swallow nests. If Tree Swallows are nesting in your bluebird boxes, set your boxes in pairs. 5-25 feet apart. Swallows and bluebirds are territorial, and will normally keep members of their own species out of the second box. But bluebirds and swallows seldom mind nesting close to each other. So providing two boxes gives both species nesting sites. Tree Swallow nests are made of grasses, and usually have white feathers in their top layer. Tree Swallow eggs are white.
• European Starlings: Make sure the entrance hole in your bluebird box is no bigger than 1 1/2 inches to keep starlings out.
• Blowflies: Blowflies are extremely dangerous parasites on nestling birds which parent bluebirds simply do not notice or know how to guard against. To protect baby bluebirds, you must actually check them by monitoring the nest. Here is what the North American Bluebird Society says about monitoring nests: "Nest monitoring should only be done during calm, mild, and dry weather conditions to reduce the chance of chilling the chicks or eggs. Open the nest box being careful not to allow the eggs to fall out or chicks to jump out. Songbirds have a very poor sense of smell and will not abandon the nest due to your handling the nest, eggs, or chicks. If chicks are in the nest, look under the nest for signs of blowfly larvae. The chicks themselves should be examined for small scars, particularly under the wings which indicates blowfly parasitism. Sometimes you may observe the larvae attached to the chick. These are easily removed by hand. Complete the monitoring as quickly as possible to minimize disturbance. When handling the chicks or removing them from the nest they should be placed in something that will protect them from the sun or wind while preventing their escape. Avoid disposing used nest material near the nest site or predators may be attracted to the site. Always be certain to close the box door securely before leaving." The Bluebird Society says, "If you identify larvae in the nest, you should replace all the nest material with dried lawn clippings in a shape similar to that of the original nest. This will increase the chance that the chicks will survive. Many bluebird enthusiasts replace all nests holding chicks periodically even before the blowfly larvae are visible."
  
  Once babies are 12 days old, don't approach the nest anymore of the babies might fledge too early, which is dangerous.

• North American Bluebird Society
• The Cornell Laboratory of Ornithology's Birdhouse Network