A father’s lifestyle impacts offspring health; yet, the underlying molecular mechanisms remain elusive. We hypothesized that a diet that changes methyl donor availability will alter the sperm and embryo epigenomes to impact embryonic gene expression and development. Here, we demonstrate that a folate-deficient (FD) diet alters histone H3 lysine 4 trimethylation (H3K4me3) in sperm at developmental genes and putative enhancers. A subset of H3K4me3 alterations in sperm are retained in the pre-implantation embryo and associated with deregulated embryonic gene expression. Using a genetic mouse model in which sires have pre-existing altered H3K4me2/3 in sperm, we show that a FD diet exacerbates alterations in sperm H3K4me3 and embryonic gene expression, leading to an increase in developmental defect severity. These findings imply that paternal H3K4me3 is transmitted to the embryo and influences gene expression and development. It further suggests that epigenetic errors can accumulate in sperm to worsen offspring developmental outcomes.