Evidence based guidelines for the neonatal transfusions are still emerging. It is always a conundrum for a pediatrician, to decide when to give packed red blood cells to a growing premature infant with or without signs and symptoms of chronic neonatal anemia. It is further complicated, as some of that clinical picture can be explained by co-morbidities like neonatal sepsis, apnea of prematurity and caffeine therapy. So, that physician needs to weigh the risks and benefits for such seemingly benign procedure and also rule out conditions that can mimic the signs and symptoms of anemia of prematurity.Here, an attempt was made to provide suggestions for giving neonatal transfusion, using an algorithm approach. A review of recent literature was done and a short review was provided.