Scientists made the discovery after studying mice whose fathers lacked the essential vitamin folate.
Their litters were almost a third more likely to include animals with birth defects than those of mice not conceived by folate-deficient fathers.
The Canadian researchers found that DNA in the sperm of the male mice was sensitive to life experiences, especially diet.
They believe their findings have implications that go beyond the effects of not having enough folate.
"Our research suggests that fathers need to think about what they put in their mouths, what they smoke and what they drink and remember they are caretakers of generations to come," said study leader Dr Sarah Kimmins, from McGill University.
"If all goes as we hope, our next step will be to work with collaborators at a fertility clinic so that we can start assessing the links in men between diet, being overweight and how this information relates to the health of their children."
Folate, also called vitamin B9, is found in green, leafy vegetables, cereals, fruit and meats.
Mothers are known to need adequate amounts of folate in their diet to prevent miscarriages and birth defects such as spina bifida, caused by the incomplete development of the brain and spinal cord or their protective covering.
Taking a folic acid supplement before conception and during pregnancy to raise folate levels has been shown to prevent seven in 10 cases of the condition.
Much less is known about the way a father's diet can affect the health and development of his sons and daughters.
The new research, published in the journal Nature Communications, indicates that a father's folate levels may be as important as a mother's. It also raises the possibility that other aspects of his lifestyle, such as smoking, might have a significant impact on the children he conceives.
"Despite the fact that folic acid is now added to a variety of foods, fathers who are eating high fat, fast food diets or who are obese may not be able to use or metabolise folate in the same way as those with adequate levels of the vitamin," said Dr Kimmins. "People who live in the Canadian north or in other parts of the world where there is food insecurity may also be particularly at risk for folate deficiency. And we now know that this information will be passed on from the father to the embryo with consequences that may be quite serious."
The study showed that in mice paternal folate deficiency was associated with an increased risk of various kinds of birth defect.
Co-author Dr Romain Lambrot, from McGill University's department of animal science, said: "We were very surprised to see that there was an almost 30% increase in birth defects in the litters sired by fathers whose levels of folates were insufficient.
"We saw some pretty severe skeletal abnormalities that included both cranio-facial and spinal deformities."
The research shows that a father's sperm is susceptible to epigenetics - environmental effects that switch genes on or off and whose influence can be passed to future generations.
In effect, sperm carries a "memory" of a father's environment and possibly his diet and lifestyle choices, said the scientists.