Sperm and oocyte deliver all the information, both genetic and epigenetic, that will specify development of the next generation. Histone modifications are one form in which the gametes deliver epigenetic information to the embryo. Our understanding of how histone modifications inherited on parental genomes influences offspring transcription and development is poorly understood. I investigated a paradigm in which worms inherit the sperm genome lacking H3K27me3, a widely conserved mark of repression. I used genetic, genomic and microscopy approaches to investigate how distributions of histone marking are established in parental germlines, transmitted to offspring and influence offspring transcription and development. I demonstrate that altered inheritance of H3K27me3 results in misregulation of many genes both in the soma and in the germline of offspring. I show that there are developmental consequences to germline health and function as a result of this altered inheritance. My analysis reveals that the derepression of numerous genes in offspring is the result of increased transcription from sperm alleles specifically, which demonstrates that sperm-inherited histone marks can directly influence offspring transcription. I found that in the germlines of fathers lacking H3K27me3, H3K36me3, a mark associated with gene transcription, invades domains normally occupied by H3K27me3 in wild-type male germlines. These changes in H3K36me3 distribution in the germlines of fathers correlate with changes in transcription that occur in offspring both in somatic cells and in the germline. This work demonstrates that gamete-inherited histone marks are one mechanism through which epigenetic information can be transmitted to the next generation to influence transcription and development in offspring. A deeper understanding of this process will inform our broader understanding of how changes to the parental epigenome may influence the development and health of future generations.