Purpose <p>This study evaluated whether severe oligozoospermia affects early cleavage-stage dynamics and blastocyst developmental competence in ICSI cycles cultured in a time-lapse system.</p> Methods <p>This retrospective matched cohort study included ICSI cycles using fresh ejaculated sperm and fresh autologous oocytes at Assisted Reproductive Center, Tam Anh Hanoi General Hospital (February 2022–December 2024). Initially, eligible cycles were identified in both groups. After propensity score matching (1:2), the final analytic cohort comprised 39 cycles in the severe oligozoospermia group and 78 cycles in the normozoospermia group. All normally fertilized zygotes (2PN) were monitored up to day 7. Cleavage-stage morphokinetic parameters and abnormal cleavage patterns were analyzed. Multivariate analyses evaluated overall morphokinetic differences. A generalized linear mixed model (GLMM) tested predictors of usable blastocysts, comparing 4095 candidate models based on the Akaike Information Criterion (AIC) and the Bayesian Information Criterion (BIC).</p> Results <p>A total of 117 ICSI cycles were analyzed after propensity score matching, including 39 cycles with severe oligozoospermia and 78 normozoospermic controls. Despite a significantly higher number of retrieved MII oocytes, the severe oligozoospermia group exhibited lower fertilization rates (71.33% vs. 77.98%, <i>p</i> = 0.012) and a reduced proportion of top-quality day-3 embryos (51.25% vs. 65.82%, <i>p</i> &lt; 0.001). Blastocyst formation and top-quality blastocyst rates did not differ significantly between groups. Cleavage-stage morphokinetic analysis revealed a statistically significant prolongation of the second cell cycle (ECC2) in the severe oligozoospermia group; however, the absolute difference was small (~ 0.25&#xa0;h) and accounted for a limited proportion of variance (R² ≈ 1.4%). No significant differences were observed in subsequent morphokinetic parameters, including ECC3 or the synchrony parameters s2 and s3. In generalized linear mixed-model analysis using embryo usability (transfer or cryopreservation) as a laboratory-defined surrogate outcome, sperm concentration was not identified as an independent predictor.</p> Conclusions <p>Severe oligozoospermia was associated with impaired fertilization outcomes and reduced day-3 embryo quality. A modest but statistically significant prolongation of ECC2 was observed; however, when sperm concentration was evaluated in isolation under ICSI conditions, later cleavage-stage morphokinetics and blastocyst development appeared largely preserved at the laboratory level. These findings are limited to sperm concentration alone and may be influenced by unmeasured sperm functional defects.</p>