Retinopathy of prematurity (ROP) is a major problem in both highly developed countries and countries with emerging technology. The incidence of ROP has been stable over the last 2 decades despite improvements in neonatology. Threshold ROP occurs in about 5% of premature infants in the US with birthweights <1.25kg. Despite treatment, a sizable minority will become blind (up to 20 to 30%). The pathophysiology of ROP can be separated into 2 phases. Phase I is hyperoxia-vasocessation. Phase II is hypoxia-vasoproliferation. The former occurs immediately following premature birth. The provision of supplemental oxygen causes retinal hyperoxia, a down regulation of vascular endothelial growth factor (VEGF) and a consequent cessation of normal retinal vascularisation. Systemic factors and increasing retinal metabolic demands cause a shift to phase II when a relative retinal hypoxia develops. This hypoxia stimulates VEGF production, leading to renewed vascularisation. This can be the resumption of normal vascularisation or abnormal neovascularisation, depending on local retinal responses. The management of ROP begins with a reliable evidence-based screening protocol. All interested parties must cooperate in developing and implementing foolproof screening protocols. Hospital officials, nursery personnel, neonatologists and ophthalmologists all have areas of responsibility in ensuring adequate screening. ROP management involves prevention, interdiction and correction. Prevention includes: adequate prenatal care which minimises premature birth, and appropriate systemic intensive care which lessens the tissue hyperoxia/hypoxia swings. Pharmacological vitamin E supplementation has largely been abandoned and ambient light reduction has been shown to be ineffective. The value of inositol supplementation and angiogenesis inhibitors in preventing ROP is presently under investigation. Interdiction concentrates on ablation of the peripheral avascular retina, thus dramatically decreasing VEGF production. Both cryotherapy and laser photocoagulation are effective; however, unfortunately, poor outcomes persist despite treatment. Supplemental oxygen administration has so far proven ineffective in limiting ROP progression. Finally, correction focuses on vitrectomy/retinal detachment repair. While anatomically successful, this procedure is often unsuccessful in terms of restoration of vision (<5% success rate). In conclusion, despite improvements in neonatology, ROP, potentially leading to blindness, continues to be a common problem associated with prematurity. Future management success must concentrate on discovering new modes of treatment, especially prevention.