Many environmental factors applied postnatally are known to affect milk production of the dam, but to date, the effects of different fetal environments on subsequent first lactational performance of the offspring have not been reported. Four hundred fifty heavy (H; 60.8 kg +/- 0.18) and 450 light (L; 42.5 kg +/- 0.17) dams were randomly allocated to ad libitum (A) or maintenance (M) nutritional regimens from d 21 until d 140 of pregnancy, under pastoral grazing conditions (HA, n = 151; HM, n = 153; LA, n = 155; LM, n = 153). At d 100 of pregnancy, a sub-group of twin-bearing dams was killed and fetal mammary glands collected. From 1 wk before lambing, all remaining dams were fed ad libitum until weaning. After weaning, female progeny were managed and fed under pastoral conditions as 1 group. At 2 yr of age, 72 twin-rearing ewe offspring were milked once a week for 7 wk. Fetuses from M-dams had heavier mammary glands (P = 0.03) compared with A-fetuses. Fetuses from H-dams had greater (P = 0.0008) mammary duct area compared with L-fetuses. At 2 yr of age, M-offspring had greater milk yields at d 7 (P = 0.02) and d 28 (P = 0.09) of lactation and tended to have greater accumulated milk yields (P = 0.11) compared with A-offspring. Ewes born to M-dams showed greater lactose percentage at d 14 (P = 0.002), d 21 (P = 0.06), and d 28 (P = 0.07) of lactation and greater (P = 0.049) accumulated lactose yields and CP (P = 0.06) yields compared with A-offspring. Ewes born to H-dams displayed greater milk yields at d 14 (P = 0.08) and d 21 (P = 0.02) and had greater accumulated milk yield (P = 0.08) and lactose yield (P = 0.04) compared with L-offspring. Lambs born to M-offspring were heavier at birth (P = 0.02) and grew faster until weaning (P = 0.02), matching the milk yield and composition data, compared with their ad libitum counterparts. Birth weight was not affected (P > 0.10) by grand dam size; however, lambs born to H-offspring grew faster from birth until d 49 of age (P = 0.03). In conclusion, dam nutrition during pregnancy affected the resulting milk production of the offspring and composition and growth of their lambs. In addition, dam size affected the milk production of the offspring, lactose yield, and growth of their lambs. These findings are important for furthering our understanding of how the environment to which the female fetus is exposed can affect her subsequent development and her ability to nourish the next generation.