Effects of environmental stressors on the parent may be transmitted to the F1 generation of plants that support global food, oil, and energy production for humans and animals. This study was conducted to determine if the effects of drought stress on parental soybean plants are transmitted to the F1 generation. The germination and seedling vigor of F1 soybean whose maternal parents, Asgrow AG5332 and Progeny P5333RY, were exposed to soil moisture stress, that is, 100, 80, 60, 40, and 20% replacement of evapotranspiration (ET) during reproductive growth, were evaluated under controlled conditions. Pooled over cultivars, effects of soil moisture stress on the parents caused a reduction in the seed germination rate, maximum seed germination, and overall seedling performance in the F1 generation. The effect of soil moisture stress on the parent environment induced seed quality that carried on the F1 generation seed gemination and seedling traits under optimum conditions and further exasperated when exposed to increasing levels of drought stress. Results indicate that seed weight and storage reserve are key factors positively associated with germination traits and seedling growth. Our data confirm that the effects of soil moisture stress on soybean are transferable, causing reduced germination, seedling vigor, and seed quality in the F1 generation. Therefore, optimal water supply during soybean seed formation period may be beneficial for seed producers in terms of optimizing seed quality and vigor characteristics of commodity seed.