How to create a nested list in reStructuredText?

If you want Sphinx to take care of the numbering for you, do this.

#. X
#. Y

   #. u 
   #. v 

#. Z

Make sure the nested list is indented to the same level as the text of the parent list (or three characters, whichever is greater), like this:

1. X

   a. U
   b. V
   c. W

2. Y
3. Z

Then you'll get the output you expected.