Scientists have found the chemicals, called PFCs, can interfere with male hormones and lead to sexual organs being ‘significantly’ shorter and thinner.
And this effect is not only seen in the womb, the researchers said. PFCs could have toxic effects in teenagers, too.
The chemicals, also found in waterproof clothing and greaseproof packaging for food, get into the bloodstream and reduce testosterone levels.
Researchers at the University of Padua in Italy made the discovery after measuring the penises of 383 men with an average age of 18.
Padua, near Venice, is in one of four areas in the world known to have high levels of PFC pollution, which used to be used in Teflon coating until it was phased out in 2013.
The chemicals, officially called perfluoroalkyl compounds, are also a health hazard in Dordrecht in the Netherlands, Shandong in China, and West Virginia in the US.
The Italian researchers found PFCs will bind to testosterone receptors and reduce levels of the male sex hormone used in the body.
As a result, men grow up with smaller penises, less healthy and mobile sperm and a shorter distance between their scrotum and anus – a sign of lower fertility.
‘As the first report on water contamination of PFCs goes back to 1977, the magnitude of the problem is alarming,’ said the researchers, led by Dr Andrea Di Nisio.
‘It affects an entire generation of young individuals, from 1978 onwards.’
PFCs come in hundreds of forms and are widely used to make everyday products more convenient and longer-lasting.
They are found in fast food packaging, paper plates, stain-resistant carpets, windshield washing fluid, fire-fighting foam and waterproof clothing.
PFCs are also in some glues, cosmetics, medicines, electronics, cleaning products, polishes and waxes, insecticides and paints.
But their toxic and potentially cancer-causing effects are only in the early stages of being understood by scientists.
Studies have linked the chemical to early menopause, low birth weight, lower fertility, thyroid problems, high cholesterol, bladder cancer and worse immune system function.
The chemicals can get into the body by being absorbed by the intestines from food and drinking water, or be breathed in.
From here they get into the bloodstream and can be toxic for foetuses when consumed by the mother and for teenagers, who undergo big hormonal changes.
For men, being exposed to PFCs while in the womb can result in higher levels of female hormones in adulthood, and developing smaller penises.
In Dr Di Nisio’s study, the penises were measured of 212 men who grew up in an area with high exposure to PFCs, and 171 men who grew up away from the area.
All were from the Veneto region of Italy, but were categorised by whether they lived in a red, yellow or green zone based on levels of PFC pollution.
Part of the region is highly polluted because run-off from a chemical factory and wastewater treatment plant made it into a major river and the drinking water.
The non-exposed men (green zone) had an average flaccid penis length of 10cm (3.9ins) – measured along the top from body to tip – while the men in the polluted areas were just 8.75cm (3.4ins) long.
Their penises were thinner, too, but by a smaller margin: the healthy men measured 10.3cm (4ins) in circumference compared to 9.65cm (3.7ins) for the polluted penises.
Dr Di Nisio and his team said not much can be done about the problem until PFCs are banned or phased out, and even then the problem is likely to continue.
PFCs are highly stable chemicals and the ones already released into the environment are expected to remain there for longer than the human species.
‘This study documents that PFCs have a substantial impact on human male health as they directly interfere with hormonal pathways potentially leading to male infertility,’ the researchers wrote.
And Dr Di Nisio told IFL Science: ‘At least here in Italy, it is very difficult to know if a product contains these chemicals.
‘In the case of a product where it is explicitly stated “PFOA-free”, I do not feel safe anyway, because PFOA is only one of hundreds of possible PFC compounds, and they can all be dangerous.
‘Therefore it is very hard to avoid any contact with any PFC.’
PFCs used to be used in Teflon coating on non-stick frying pans but were phased out in 2013 and replaced with a less controversial chemical.
DuPont and Chemours, the manufacturers of Teflon, had to pay a $671million (£525m) settlement last year following the spillage of PFCs into a river in West Virginia.
The leak allegedly contaminated local water supplies and was linked to diseases including testicular and kidney cancers.
Chemours now makes non-stick coatings with a chemical called PTFE, which it says does not have any PFCs in it.
Despite some high-profile companies phasing out the use of damaging PFCs, they are still used around the world in imported goods, the Environmental Protection Agency says.
The research was published in the Journal of Clinical Endocrinology and Metabolism.