As with other earthworm species, Eisenia fetida is hermaphroditic. However, two worms are still required for reproduction. The two worms join clitellums, the large orangeish bands which contain the worms’ reproductive organs, and which are only visible during the reproduction process. The two worms exchange sperm. Both worms then secrete cocoons which contain several eggs each. These cocoons are lemon-shaped and are pale yellow at first, becoming more brownish as the worms inside become mature. These cocoons are clearly visible to the naked eye.
Copulation and reproduction are separate processes in earthworms. The mating pair overlap front ends ventrally and each exchanges sperm with the other. The clitellum becomes very reddish to pinkish in color. The cocoon, or egg case, is secreted by the clitellum band which is near the front of the worm, but behind the spermathecae. Some time after copulation, long after the worms have separated, the clitellum secretes the cocoon which forms a ring around the worm. The worm then backs out of the ring, and as it does so, injects its own eggs and the other worm’s sperm into it. – Wikipedia
As the worm slips out, the ends of the cocoon seal to form a vaguely lemon-shaped incubator (cocoon) in which the embryonic worms develop. They emerge as small, but fully formed earthworms, except for a lack of the sex structures, which develop later in about 60 to 90 days. They attain full size in about one year, sometimes sooner. Scientists predict that the average lifespan under field conditions is 4–8 years, still most garden varieties live only one to two years. Several common earthworm species are mostly parthenogenetic, that is, with asexual reproduction resulting in clones. – Wikipedia