Projective superspace provides a natural framework for the construction of actions coupling hypermultiplets to conformal supergravity. We review how the off-shell actions are formulated in superspace and then discuss how to eliminate the infinite number of auxiliary fields to produce an on-shell N=2 supersymmetric sigma model, with the target space corresponding to a generic 4n-dimensional hyperkahler cone. We show how the component action coupling the hypermultiplets to conformal supergravity may be constructed starting from curved superspace. The superspace origin of the geometric data -- the hyperkahler potential, complex structures, and any gauged isometries -- is also addressed.

47 pages; v2: typos corrected, calculations streamlined, references added