Dry storage at room temperature (RT) could simplify spermatozoa banking. Here, we explored DNA stability and in vitro and in vivo development of embryos derived from vacuum-dried encapsulated (VDE) ram spermatozoa stored for four years or after accelerated aging. While some genomic damage was detected at time 0, DNA fragmentation increased from 3.32±3% (time 0) to 37.64±4% (4 years). A decrease in blastocyst rate was observed after four years of storage and 6.7 years of simulated storage (10.2% and 9% versus 13.16% at time 0). Embryo quality, assessed based on Cdx2 and Inf-τ gene expression, declined over time. Only two of the 23 embryos transferred into synchronized ewes were implanted but were lost by day 40. In conclusion, dry spermatozoa generated blastocysts after four years of RT storage, but their post-implantation development was impaired. Optimization of the water extraction and storage conditions could better preserve the spermatozoa's DNA integrity, resulting in improved embryo quality, compatible with development to term.