One-carbon metabolism, including the folate cycle, has a crucial role in fetal development though its molecular function is complex and unclear. The hypomorphic Mtrr gt allele is known to disrupt one-carbon metabolism, and thus methyl group availability, leading to several developmental phenotypes (e.g., neural tube closure defects, fetal growth anomalies). Remarkably, previous studies showed that some of the phenotypes were transgenerationally inherited. Here, we explored the genome-wide epigenetic impact of one-carbon metabolism in placentas associated with fetal growth phenotypes and determined whether specific DNA methylation changes were inherited. Firstly, methylome analysis of Mtrr gt/gt homozygous placentas revealed genome-wide epigenetic instability. Several differentially methylated regions (DMRs) were identified including at the Cxcl1 gene promoter and at the En2 gene locus, which may have phenotypic implications. Importantly, we discovered hypomethylation and ectopic expression of a subset of ERV elements throughout the genome of Mtrr gt/gt placentas with broad implications for genomic stability. Next, we determined that known spermatozoan DMRs in Mtrr gt/gt males were reprogrammed in the placenta with little evidence of direct or transgenerational germline DMR inheritance. However, some spermatozoan DMRs were associated with placental gene misexpression despite normalisation of DNA methylation, suggesting the inheritance of an alternative epigenetic mechanism. Integration of published wildtype histone ChIP-seq datasets with Mtrr gt/gt spermatozoan methylome and placental transcriptome datasets point towards H3K4me3 deposition at key loci. These data suggest that histone modifications might play a role in epigenetic inheritance in this context. Overall, this study sheds light on the mechanistic complexities of one-carbon metabolism in development and epigenetic inheritance.