Background Numerous procedures are available for nipple reconstruction without a single gold standard. This study presents a method for reducing donor-site morbidity in nipple reconstruction using a composite nipple graft after transverse rectus abdominis musculocutaneous flap breast reconstruction. Methods Thirty-five patients who underwent nipple reconstruction using a composite nipple graft technique between July of 2001 and December of 2009 were enrolled in this study. To reduce the donor site morbidity, the superior or superior-medial half dome harvesting technique was applied preserving the lateral cutaneous branch of the fourth intercostal nerves. The patients were asked to complete a previously validated survey to rate the color and projection of both nipples, along with the sensation and contractility of the donor nipple; and whether, in retrospect, they would undergo the procedure again. To compare projection, we performed a retrospective chart review of all the identifiable patients who underwent nipple reconstruction using the modified top hat flap technique by the same surgeon and during the same period. Results Thirty-five patients were identified who underwent nipple reconstruction using a composite nipple graft. Of those, 29 patients (82.9%) responded to the survey. Overall, we received favorable responses to the donor site morbidity. Projection at postoperative 6 months and 1 year was compared with the immediate postoperative results, as well as with the results of nipples reconstructed using the modified top hat flap. Conclusions The technique used to harvest donor tissue is important. Preserving innervation of the nipple while harvesting can reduce donor site morbidity.