Epigenetic mechanisms offer a largely untapped resource for breeding crops with enhanced resilience to environmental stresses. In this study, we investigated the role of transgenerational epigenetic memory in wheat exposed to recurrent drought and heat episodes. A factorial field and controlled-environment experiment was conducted using elite wheat lines subjected to repeated cycles of stress across three generations. DNA methylation profiling was performed using whole-genome bisulfite sequencing (WGBS), and histone modification landscapes were analyzed with ChIP-seq to identify stable epigenetic markers associated with stress memory. Parallel physiological assessments, including stomatal conductance, canopy temperature depression, and grain yield stability, were integrated with molecular data to establish genotype–epigenotype–phenotype linkages. The results revealed that progeny derived from stressed parental lines consistently exhibited a 15–22% higher grain yield under recurrent drought compared to the controls, despite there being no changes in underlying nucleotide sequences. WGBS identified stable methylation patterns at loci linked to ABA signaling and root development, while ChIP-seq confirmed heritable enrichment of H3K4me3 markers at stress-responsive genes. Notably, plants inheriting both methylation and histone signatures showed superior water-use efficiency and sustained photosynthetic rates. Machine learning models integrating epigenetic and phenotypic datasets improved prediction accuracy of drought tolerance by 27% over genomic-only models, demonstrating the value of epigenetic markers in selection pipelines. This work provides strong evidence that epigenetic memory can be harnessed as a novel breeding resource for wheat improvement. Future efforts should integrate stable epigenetic signatures into genomic selection frameworks to accelerate the development of climate-resilient cultivars.