Researchers from the University of Turku examined three groups of men born between 1979 and 1987, and found that those who were born in the late 1980s had a lower sperm count than those born at the beginning of the decade, reports the BBC.
The study subjects were Finnish men because they have previously been shown to have some of the highest sperm counts in the world.
But the scientists were never sure if this was because of their genetics or because they were exposed to fewer harmful chemicals.
The total sperm counts were 227 million for men born in 1979-81, 202 million for those born in 1982-83 and 165 million for men born in 1987, respectively.
In addition, the researchers observed that there was a higher incidence of testicular cancer in men born around 1980 compared with men born around 1950.
"These simultaneous and rapidly occurring adverse trends suggest that the underlying causes are environmental and, as such, preventable," said lead author Prof Jorma Toppari.
"Our findings further necessitate the efforts to identify reasons for the adverse trends in reproductive health to make preventive measures possible," he added.
"Scientists have been concerned for some time about the possibility that younger men may be producing less sperm than their fathers and grandfathers did at the same age," said Allan Pacey, senior lecturer in andrology at the University of Sheffield.
But he said methods used to measure sperm have changed significantly over time and have not always been reliable.
Pacey said this study used ''very robust laboratory methods''.
"The fact that sperm counts have dropped so quickly, and mirrors the increase in the incidence of testicular cancer in Finland, suggests that the effect is probably environmental," he said.
"The best working theory we have to explain why sperm counts may be declining is that chemicals from food or the environment are affecting the development of testicles of boys in the womb or in their early years of life," he added.
The study is published in the International Journal of Andrology