Objective -The aim of this study is to show the effect of oxygen therapy in premature babies on the development of severe ROP. Materials and methods -This retrospective research covered a period of two years, and included 108 premature babies, with birth weight <1500 g and gestational age <33 weeks, at the Children's Ward of the University Hospital Clinical Centre, Banja Luka. The effects of the length of oxygen therapy and episodes of hypoxia and hyperoxia on the development of severe ROP were analysed. Results -ROP was present in 64 (59.2%) newborns, of which 21 (19.4%) had severe ROP. The incidence of severe ROP is statistically higher with lower birth weight, <1150 g (p<0.01), lower gestational age <30 weeks, longer oxygen therapy and when there were frequent episodes of hyperoxia and hypoxia. By multiple logistic regression analysis, a very strong connection was established between severe ROP and exposure to episodes of hyperoxia (OR 32.73; CI 4.14-255.37), episodes of hypoxia (OR 14.08; CI 3.81-51.94), and oxygen therapy longer than 10 days (OR 15.54;. For most risk factors tested, there was a strong connection between severe ROP and birth weight <1250 g, gestational age <30 weeks, respiratory distress syndrome and perinatal asphyxia. Conclusion -Long-term oxygen therapy, prematurity and low birth weight with hypoxia are important factors in the development of severe ROP. Constant education is necessary of staff regarding the potentially harmful effects of oxygen in order to prevent both hypoxia and hyperoxia.