You can breed wolves through the pen. You’ll need to pick a male and female of an equal rarity in the breeding tab. You can’t breed if your store of food or water is below 20% or if the wolves you’ve chosen are under level 4 or exhausted.
There is an equal chance that the wolfling will have either one of the parents’ fur colors. If both parents have the same fur color, so will their pup. When breeding, the male and female will return to the Plaguelands, but their offspring might be of a rarer grade than its parents.
When breeding Direwolves, you can block one of the parents' skills from passing down to their offspring. This means that their pup will definitely not inherit that specific skill.