Multigenerational effects of silver nanoparticles (Ag-NPs) on reproduction of the soil nematode Caenorhabditis elegans have been observed previously. However, mechanisms of this reproductive sensitivity are unknown. Here we examine whether epigenetic changes occur as a result of multigenerational exposure to Ag-NPs and whether such modifications can be inherited by unexposed generations. Changes at histone methylation markers, histone 3 lysine 4 dimethylation (H3K4me2) and histone 3 lysine 9 trimethylation (H3K9me3), known to affect reproduction, as well as changes in the expression of the genes encoding demethylases and methyltransferases associated with the selected markers, were investigated. We exposed C. elegans at EC30 to AgNO3, pristine Ag-NPs, and its environmentally transformed product, sulfidized Ag-NPs (sAg-NPs). Histone methylation levels at H3K4me2 increase in response to pristine Ag-NP exposure and did not recover after rescue from the exposure, suggesting transgenerational inheritance. Compared to pristine Ag-NPs, exposure to transformed sAg-NPs significantly decreased H3K4me2 and H3K9me3 levels. These changes in the histone methylation were also supported by expression of spr-5 and jmjd-2 (H3K4me2 and H3K9me3 demethylases, respectively) and set-30 (H3K4me2 methyltransferase). Our study demonstrates that multigenerational exposure to Ag-NPs induces epigenetic changes that are inherited by unexposed offspring. However, environmental transformations of Ag-NPs may also reduce toxicity via epigenetic mechanisms, such as changes at histone methylation.