Colonial breeding occurs in a wide range of taxa, however the advantages promoting its evolution and maintenance remain poorly understood. In many avian species, breeding colonies vary by several orders of magnitude and one approach to investigating the evolution of coloniality has been to examine how potential costs and benefits vary with colony size. Several hypotheses predict that foraging efficiency may improve with colony size, through benefits associated with social foraging and information exchange. However, it is argued that competition for limited food resources will also increase with colony size, potentially reducing foraging success. Here we use a number of measures (brood feeding rates, chick condition and survival, and adult condition) to estimate foraging efficiency in the fairy martin Petrochelidon ariel, across a range of colony sizes in a single season (17 colonies, size range 28-139 pairs). Brood provisioning rates were collected from multiple colonies simultaneously using an electronic monitoring system, controlling for temporal variation in environmental conditions. Provisioning rate was correlated with nestling condition, though we found no clear relationship between provisioning rate and colony size for either male or female parents. However, chicks were generally in worse condition and broods more likely to fail or experience partial loss in larger colonies. Moreover, the average condition of adults declined with colony size. Overall, these findings suggest that foraging efficiency declines with colony size in fairy martins, supporting the increased competition hypothesis. However, other factors, such as an increased ectoparasitise load in large colonies or change in the composition of phenotypes with colony size may have also contributed to these patterns.