Cypermethrin (CYP) is a widely used synthetic pyrethroid insecticide and regarded as a potential endocrine disruptor. CYP exposure may pose a great risk to human health including adverse effect on their reproductive functions. This study aimed to delineate the effects of perinatal exposure of rats to CYP on the sexual maturation and fertility of F1 male progeny. Pregnant rats (F0) were gavaged daily with CYP (0, 1, 10, 25 mg/kg BW/day) and Diethylestilbestrol (DES, 10 μg/kg BW/day), as positive control from gestation day 6 to postnatal day 21. The effects of CYP on body weight gain and reproductive functions were evaluated at the Juvenile (PND 22), peri-pubertal (PND 45) and adult (PND 75) stages of development. A significant delay in the age of testicular descent and prepuce separation was observed at 1 and 25 mg/kg doses of CYP. At the same dose level, reproductive organ development and their functions were also affected. A significant alteration in testicular histology, expression of steroid hormone receptors, and circulatory steroid hormones was observed throughout development. Reduced sperm count and motility were observed at PND 75 leading to subfertility and reduced litter size. These adult male rats when cohabitated with unexposed normal cycling females, the F2 fetuses exhibited developmental defects. Taken together, CYP perinatal exposure caused significant long lasting effects of the reproductive functions of F1 generation male rats, which were vertically transmitted to F2 generation leading to developmental defects. The mechanism of transgenerational effects needs to be explored in details.