Work with lyophilized sperm helps delineate the factors required for successful fertilization. We investigated the use of lyophilized sperm in equine embryo production. In Experiment 1, sperm DNA fragmentation index was not affected by three freeze/thaw or lyophilization cycles. In Experiment 2, oocytes injected with lyophilized sperm or with sperm from a treatment in which lyophilized sperm were suspended in sperm cytoplasmic extract (SE) yielded blastocyst development rates of 0 and 28% respectively (P < 0.05). In Experiment 3, blastocyst development rate was 6-11% after injection of sperm lyophilized from fresh or frozen-thawed semen, suspended in SE. In Experiment 4, sperm lyophilized 3.5 months or 1 week previously, suspended in SE, yielded similar blastocyst rates (6 and 3% respectively). Rates of normal pregnancy after transfer were 7/10 and 5/7 for embryos from control and lyophilized sperm treatments respectively. Three pregnancies from the lyophilized sperm treatments were not terminated, resulting in two healthy foals. Parentage testing determined that one foal originated from the lyophilized sperm; the other was the offspring of the stallion providing the sperm extract. Further testing indicated that two of five additional embryos in the lyophilized sperm treatment originated from the stallion providing the sperm extract. We conclude that both lyophilized stallion sperm and stallion sperm processed by multiple unprotected freeze-thaw cycles (as for sperm extract) can support production of viable foals. To the best of our knowledge, this is the first report on production of live offspring by fertilization with lyophilized sperm in a non-laboratory animal species.