Minecraft Java Edition – Is The Nether Randomly Generated?

According to this thread in the Minecraft Forums that seems to have peeked into the code, length dilation does not affect the y-axis.

http://www.minecraftforum.net/topic/345806-nether-portal-science/

Summary version

• Calculate coordinate of destination based on entry coordinate. (X, Y, Z) <---> (X*8, Y, Z*8)

• At destination, look for the closest active nether portal within a 128 block radius of the player (257x257x128 area centered on destination) (the Euclidean distance (the 3D distance)). Teleport player there if one exists.

• If no portal exists in the 128 block radius, the game creates one by looking for the closest possible nearby position within a 16 radius column (33x33x128 area) that has enough space to spawn a portal. And teleports the player there.

• And if there's no possible spawn position with solid ground, it just creates a portal at the destination anyway, converting any blocks in the way into a portal.

Yes, the Nether is generated the same way as other terrain (in fact it's just a special biome). It uses your world seed to generate it, so re-generating will not affect the layout of it (although there may be slight changes, such as the position of mushrooms, but I'm guessing that this doesn't bother you too much).