The impacts of ocean acidification will depend on the ability of marine organisms to tolerate, acclimate and eventually adapt to changes in ocean chemistry. Here, we use a unique transgenerational experiment to determine the molecular response of a coral reef fish to short-term, developmental and transgenerational exposure to elevated CO2, and to test how these responses are influenced by variations in tolerance to elevated CO2 exhibited by the parents. Within-generation responses in gene expression to end-of-century predicted CO2 levels indicate that a self-amplifying cycle in GABAergic neurotransmission is triggered, explaining previously reported neurological and behavioural impairments. Furthermore, epigenetic regulator genes exhibited a within-generation specific response, but with some divergence due to parental phenotype. Importantly, we find that altered gene expression for the majority of within-generation responses returns to baseline levels following parental exposure to elevated CO2 conditions. Our results show that both parental variation in tolerance and cross-generation exposure to elevated CO2 are crucial factors in determining the response of reef fish to changing ocean chemistry.