The most common way to propagate gardenia is through cuttings. To take a cutting, cut 1/2 of newer growth not older than about a year. Cut the stem diagonally from one side to the other. Make this cut between 1/2 and 1 inch long. Dip the cut end in rooting hormone and place the cutting in a damp rooting medium like pearlite or vermiculite. Keep the plant at at least 75 degrees and, if possible, wrap the cutting, pot and rooting medium in plastic to keep the humidity as high as possible. Keep the rooting medium moist, but don't overwater.
With air layering, you encourage a woody gardenia branch to root while still attached to the plant or bush. To air layer a gardenia, make two circular cuts all the way around a woody stem between 1 1/2 and 2 inches apart. Cut through the bark to the wood. Make a straight cut connecting these two cuts and peel the bark away. You should have a long wound on the tree. Wrap the wound with a handful of wet sphagnum moss. Seal the moss in place with clear plastic--be sure to tightly seal to the branch to try to completely eliminate evaporation. Watch the plastic. When you can see roots on all sides of the sphagnum moss, cut the gardenia off and plant in a new location or pot.
Some gardenia plants have several main stems coming out of a root stock. If you are careful, you can sometimes divide the root stock, creating two separate plants. Suitable root stocks for division usually have two or more widely separated stems. To separate the root stock, cut carefully between the stems to create two halves of the original plant. Plant both halves in sterile potting soil to eliminate the risk of contamination and water every one to three days for a month. Do not fertilize the newly cut root stocks for the first month after transplanting.