Cyclophosphamide, administered to the male rat, produces increased pre- and postimplantation loss in the progeny as well as an increase in the numbers of malformed and growth retarded fetuses. The purpose of this study was to determine whether the adverse effects of chronic paternal cyclophosphamide exposure are transmissible to the next generation, the F2 progeny. Adult male rats were treated by gavage daily with saline or with cyclophosphamide (3.4 or 5.1 mg/kg) for 4 or 18 weeks and mated. The male and female offspring in each treatment group (F1 generation) were randomly mated. The resulting pregnant females were killed on day 20 of gestation to evaluate progeny outcome in the F2 generation. There was a significant increase in postimplantation loss among the offspring of the group whose fathers had been treated with cyclophosphamide at a dose of 5.1 mg/kg/day. Exposure to a dose of 5.1 mg/kg/day of cyclophosphamide also resulted in an F2 generation with a significantly decreased mean fetal weight per litter and a significant increase in the number of malformed fetuses. The malformations observed among the F2 progeny included open eyes, omphalocele, generalized edema, syndactyly, gigantism, and dwarfism. Thus, exposure of the father to cyclophosphamide does result in a specific and heritable alteration in the fertility of the surviving "apparently normal" F1 progeny. Interestingly, the adverse consequences of exposure of male rats to cyclophosphamide are similar in the F2 generation to those previously reported for the F1 progeny.