The Deepwater Horizon oil spill resulted in the release of over 640 million L of crude oil into the Gulf of Mexico, affecting over 2000 km of shoreline, including estuaries that serve as important habitats and nurseries for aquatic species. Cyprinodon variegatus (sheepshead minnow) are small‐bodied fish that inhabit northern Gulf of Mexico estuaries, are easily adaptable to laboratory conditions, and are commonly used in toxicological assessment studies. The purpose of the present study was to determine the somatic, reproductive, and developmental effects of an environmentally relevant polycyclic aromatic hydrocarbon (PAH) mixture, the oil high‐energy water accommodated fraction (HEWAF), on experimentally exposed sheepshead minnow (F0) as well as 2 generations of offspring (F1 and F2) without additional exposure. The F0 generation exposed to HEWAF had increased liver somatic indices, altered egg production, and decreased fertilization. Several developmental endpoints in the F1 were altered by F0 HEWAF exposure. As adults, low HEWAF‐exposed F1 females demonstrated decreased weight and length. Both the F1 and F2 generations derived from high HEWAF‐exposed F0 had deficits in prey capture compared to control F1 and F2, respectively. Correlations between endpoints and tissue PAHs provide evidence that the physiological effects observed were associated with hydrocarbon exposure. These data demonstrate that PAHs were capable of causing physiological changes in exposed adult sheepshead minnow and transgenerational effects in unexposed offspring, both of which could have population‐level consequences. Environ Toxicol Chem 2019;38:638–649. © 2018 SETAC