“Sangre de Drago” (Croton urucurana Baill.) is a native tree of South America with high value for urban afforestation or the restoration of riparian forests. This study aimed to evaluate the effect of container size and fertilization on the quality of seedlings produced in a plug+1 system. In the establishment phase, the impact of container size (110 mL or 250 mL) and fertilization (with or without) on seedling quality were evaluated before transplanting into bigger containers. In the rapid growth phase, the effect of container size (1 L, 1.5 L, and 3.5 L) on survival and seedling quality was evaluated. At the end of each phase, seedling quality was evaluated through morphological and physiological attributes. Data were analyzed through linear models, generalized linear models, and nonlinear regressions. In the establishment phase, seedlings grown in 250 mL containers with fertilization showed the best performance in morphological and physiological variables and the Dickson quality index. In the rapid growth phase, seedlings grown in 3.5 L containers showed the highest values in total height, stem diameter, total dry weight, Dickson quality index, and the lowest mortality at the end of the experiment. We recommended 250 mL containers with fertilization in the establishment phase until the seedling can be lifted with its intact root ball. We then transplant it into 3.5 L containers for the rapid growth and hardening phases until out-planting.