Folate is an essential vitamin for vertebrate embryo development. Methotrexate (MTX) is a folate antagonist that is widely prescribed for autoimmune diseases, blood and solid organ malignancies, and dermatologic diseases. Although it is highly contraindicated for pregnant women, because it is associated with an increased risk of multiple birth defects, the effect of paternal MTX exposure on their offspring has been largely unexplored. Here, we found MTX treatment of adult medaka male fish (Oryzias latipes) causes cranial cartilage defects in their offspring. Small non-coding RNA (sncRNAs) sequencing in the sperm of MTX treated males identify differential expression of a subset of tRNAs, with higher abundance for specific 5′ tRNA halves. Sperm RNA methylation analysis on MTX treated males shows that m5C is the most abundant and differential modification found in RNAs ranging in size from 50 to 90 nucleotides, predominantly tRNAs, and that it correlates with greater testicular Dnmt2 methyltransferase expression. Injection of sperm small RNA fractions from MTX-treated males into normal fertilized eggs generated cranial cartilage defects in the offspring. Overall, our data suggest that paternal MTX exposure alters sperm sncRNAs expression and modifications that may contribute to developmental defects in their offspring.