Scientists from the University of Padua, found that young men who grew up in an area polluted with PFCs have penises 12.5 per cent shorter and 6.3 per cent thinner than healthy guys - that's up to half an inch shorter.
They found these numbers by 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.
The Italian researchers found PFCs will bind to testosterone receptors and reduce levels of the male sex hormone used in the body.
Therefore, males 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."
In his study, Dr Di Nisio measured the penises of 212 men who grew up in another highly polluted area, and measured 171 men penises who grew up away from the area.
The non-exposed men had an average flaccid penis length of 10cm while men in the polluted areas measured just 8.75cm long.
Their penises were thinner too: the healthy men measured 10.3cm in circumference compared to 9.65cm for those exposed to PFCs.
"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.
The research was published in the Journal of Clinical Endocrinology and Metabolism.