To evaluate reproductive outcomes of artificial insemination and IVF with donor sperm (AID or IVF-D) for male-factor couples with a history of unsuccessful ICSI attempt. This retrospective cohort includes couples with severe male-factor infertility who failed ICSI treatment, and subsequently underwent semen donation treatment. We report the following outcomes: (1) live birth rates in AID and IVF-D treatment for couples with severe male infertility factors and prior ICSI failures; (2) paternal impact on embryo development of the same oocyte cohort; (3) prognostic factors in obtaining a live birth with donor semen. Of 92 women with failed ICSI cycles (26 with multiple attempts), 45 couples underwent AID treatment. Live birth rate per cycle of AID was 18.9%. Fifty-three patients underwent IVF-D including 6 couples who previously did not conceive with AID. Embryological outcomes including fertilization, viable cleavage embryos, and blastocyst formation rates were significantly lower in ICSI cycles with partner sperm compared with IVF-D (P < 0.01). Logistic regression analysis showed that female age and the severity of spermatogenetic disorder are prognostic factors in obtaining a live birth with donated sperm. Couples with severe male infertility factor (azoospermia or extreme oligoasthenospermia) and a history of unsuccessful ICSI cycles benefit from treating with donor sperm. ICSI fertilization, embryo viability, and progression of the embryo to the blastocyst stage are significantly deteriorated by semen parameters. The prognostic factors identified may help couples plan their treatment and prepare for their parenthood journey.