Recent evidence has linked human phthalate exposure to abnormal reproductive and hormonal effects. Phthalates are plasticizers that confer flexibility and transparency to plastics, but they readily contaminate the body and the environment. In this study, timed pregnant CD1 outbred mice were treated with di-(2-ethylhexyl) phthalate (DEHP) from Embryonic Day 7 (E7) to E14. The subsequent generation (F1) offspring were then bred to produce the F2, F3, and F4 offspring, without any further DEHP treatment. This exposure scheme disrupted testicular germ cell association and decreased sperm count and motility in F1 to F4 offspring. By spermatogonial transplantation techniques, the exposure scheme also disrupted spermatogonial stem cell (SSC) function of F3 offspring. The W/W-V recipient testes transplanted with F3 offspring germ cells from the DEHP-treated group had a dramatically lower percentage of donor germ cell-derived spermatogenic recovery in seminiferous tubules when compared to the recipient testes transplanted with CD1 control germ cells. Further characterization showed that the major block of donor germ cell-derived spermatogenesis was before the appearance of undifferentiated spermatogonia. Interestingly, the testes transplanted with the F3 offspring germ cells from the DEHP-treated group, when regenerated, replicated testis morphology similar to that observed in the testes from the F1 to F3 offspring of the DEHP-treated group, suggesting that the germ cell disorganization phenotype originates from the stem cells of F3 offspring. In conclusion, embryonic exposure to DEHP was found to disrupt testicular germ cell organization and SSC function in a transgenerational manner.