Summary Reasons for performing study The fertility of sex‐sorted, cryopreserved stallion sperm must be improved for the sex‐sorting technology to be applied commercially. Objectives To optimise the conditions used to liquid store stallion sperm prior to sex‐sorting and assess the fertility of sperm following sex‐sorting and cryopreservation. Study design Both in vitro experiment and randomised controlled trial in healthy, client‐owned mares. Methods Stallion ejaculates (n = 9) were diluted in either a skimmed milk (KMT) or BSA (I‐BSA) based media to 25 × 106 sperm/ml directly (+SP25) or washed to remove seminal plasma and diluted to 25 or 111 × 106 sperm/ml (‐SP25 and ‐SP111). Sperm were stored for 18 h at 10 to 15°C and ‐SP25 and +SP25 treatments were centrifuged and resuspended to 111 × 106 sperm/ml. Sperm were incubated under H33342 staining conditions and motility, viability and acrosome integrity assessed. Semen was collected from stallions (n = 4), liquid stored at 10–15°C for up to 5 h and sperm either cryopreserved directly, sex‐sorted and cryopreserved, or sex‐sorted and returned to liquid storage until insemination. Low‐dose hysteroscopic insemination was performed in 23 mares randomly allocated to the semen preparation group and pregnancy determined following embryo flushing on Day 9 after ovulation, or via transrectal ultrasonography on Day 14 after ovulation. Results Skimmed milk was superior to I‐BSA in maintaining motility, viability and acrosome integrity. Seminal plasma removal did not affect the parameters measured at the concentrations examined. Conception rates did not differ significantly between the groups, although a high incidence of pregnancy loss was observed in both the cryopreserved groups. Conclusions While the conception rates achieved are among the highest yet reported for sex‐sorted, cryopreserved stallion sperm, the high incidence of pregnancy loss suggests that the development of the resulting embryos was significantly impaired by the sperm processing treatments.