When premature birth occurs, the retinal vasculature, which normally develops until birth, is immature. In addition, the premature infant is deficient in several maternally derived factors (such as ω-3 PUFAs and IGF-1, which are transferred during the third trimester) that are essential for healthy blood vessel development, thus further compromising the prognosis. Moreover, the premature patient is mechanically ventilated to overcome pulmonary insufficiencies, and as a consequence, the supplemental oxygen given during mechanical ventilation contributes to retinal vascular obliteration due to oxidant stress and suppression of oxygen-regulated proangiogenic factors such as VEGF and Epo. Following the initial phase of vascular dropout, a second phase of compensatory and destructive neovascularization results and is driven by hypoxia-induced angiogenic factors. Current therapeutic interventions rely on invasive procedures such as laser photocoagulation, whereby affected areas of the retina are cauterized. A number of future treatments, including anti-VEGF therapy and the use of antioxidants, are currently being evaluated.