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Abstract Background Defining the mechanisms that establish and regulate the transmission of epigenetic information from parent to offspring is critical for understanding disease heredity. Currently, the molecular pathways that regulate epigenetic information in the germline and its transmission to offspring are poorly understood. Results Here we provide evidence that Polycomb Repressive Complex 2 (PRC2) regulates paternal inheritance. Reduced PRC2 function in mice resulted in male sub-fertility and altered epigenetic and transcriptional control of retrotransposed elements in foetal male germ cells. Males with reduced PRC2 function produced offspring that over-expressed retrotransposed pseudogenes and had altered preimplantation embryo cleavage rates and cell cycle control. Conclusion This study reveals a novel role for the histone-modifying complex, PRC2, in paternal intergenerational transmission of epigenetic effects on offspring, with important implications for understanding disease inheritance.