Per- and polyfluorinated alkyl substances (PFASs) are synthetic organofluorine compounds with unique stability accompanied with hydrophobic and lipophobic properties. Perfluorooctane sulfonate (PFOS) and Perfluorooctanoic acid (PFOA) are of high concern due to their wide application in consumer and industrial products, extreme persistence, abundant occurrence in the environment and their toxic effect to humans and animals. However, knowledge on the molecular mechanisms of toxicity and the effects on reproduction output remain scarce. In this study, we analyzed the effects of PFOS and PFOA on Daphnia magna. Acute toxicity, development, reproduction, lipid metabolism (lipid-accumulation) and lifespan was investigated, as well as the expression of genes related to these endpoints. Exposure of PFOS and PFOA at 1, 10 and 25 μM did not cause acute lethality. Hatching was reduced following exposure to both compounds, and lifespan was decreased following exposure to 25 μM PFOS. Body length of Daphnia magna was reduced significantly by 25 μM PFOS following 7 days exposure. Lipid staining revealed that all PFAS exposures increased lipid accumulation. qRT-PCR analysis of genes involved in lipid metabolism suggests that the increase in lipid content could be due to inhibition of genes involved on absorption and catabolism of fatty acids. Exposure to both PFOA and PFOS reduced the fecundity significantly. Downregulation of genes involved in development and reproductive process, including vtg2, vasa, EcRA, EcRB, usp, jhe, HR3, ftz-F1, E74 and E75 were observed. The alterations in developmental and reproductive genes as well as the disturbed lipid metabolism provides mechanistic insight into the possible causes for decreased fecundity and lifespan observed following exposure to both PFOS and PFOA.