Retinopathy of prematurity (ROP) continues to be a major preventable cause of blindness and visual handicaps globally. With improved perinatal care, improved survival of moderately preterm infants, and limited resources for oxygen delivery and monitoring, more mature preterm infants are developing severe ROP in developing countries. The pathophysiology of ROP is characterized by two phases. Phase I ROP is due to vaso-obliteration beginning immediately after birth secondary to a marked decrease in vascular endothelial growth factor (VEGF) and insulin-like growth factor-1 (IGF-1). Phase II begins around 33 weeks' postmenstrual age (PMA). During this phase, VEGF levels increase, especially if there is retinal hypoxia with increasing retinal metabolism and demand for oxygen leading to abnormal vasoproliferation. Since the original description of ROP in 1942 by Terry et al. [Am J Ophthalmol 1942;25:203-204], four epidemics of ROP have been observed. Prevention or early treatment of ROP involves careful titration of oxygen saturation by pulse oximeter (SpO2). Optimal SpO2 target remains elusive. Most of the large trials have focused on either a low SpO2 (85-89%) or a high SpO2 (91-95%) from the first day of birth to 36 weeks' PMA. Although the incidence of severe ROP and bronchopulmonary dysplasia decreased significantly, predischarge mortality was higher in these studies. Use of graded SpO2 during the 2 different phases of ROP (early, low SpO2 during phase I vs. late, high SpO2 during phase II) may be the best approach to prevent this disabling condition. Further trials should focus on this strategy. Other biological agents that are currently being studied include IGF-1 with IGF-binding protein-3 (rhIGF-1 + rhIGFBP-3) and propranolol. For advanced stages of ROP, laser ablation of avascular retina, early treatment of ROP (ETROP) protocol, intravitreal injection of anti-VEGF antibodies (e.g. bevacizumab) and vitrectomy are used to protect central vision and prevent retinal detachment. Long-term complications such as refractory errors, recurrence of ROP and risk of retinal detachment require continued follow-up with an ophthalmologist through adolescence and beyond. Optimal nutrition including adequate intake of omega-3 polyunsaturated fatty acids and decreasing infection/inflammation to promote normal vascularization are important strategies. Screening guidelines for ROP based on local incidence of ROP in different regions of the world are very important. Oxygen therapy is clearly a modifiable risk factor to decrease ROP that needs further study. Understanding the two phases of ROP will help to identify appropriate therapeutic strategies and improve visual outcomes in many preterm infants globally.