Retinopathy of prematurity (ROP) is a common blinding disease in children in the developed world despite current treatment, and is becoming increasingly prevalent in the developing world. ROP progresses in two phases. The first phase begins with delayed retinal vascular growth after birth and partial regression of existing vessels, followed by a second phase of hypoxia-induced pathological vessel growth. Two major risk factors of ROP are the use of oxygen and a decreased gestation period. Excessive oxygen contributes to ROP through regulation of vascular endothelial growth factor (VEGF). Suppression of VEGF by oxygen in phase I of ROP inhibits normal vessel growth, whereas elevated levels of VEGF induced by hypoxia in phase II of ROP precipitate pathological vessel proliferation. Insulin-like growth factor 1 (IGF-1) is a critical non-oxygen-regulated factor in ROP. We have found that serum levels of IGF-1 in premature babies directly correlate with the severity of clinical ROP. IGF-1 acts indirectly as a permissive factor by allowing maximal VEGF stimulation of vessel growth. Lack of IGF-1 in preterm infants prevents normal retinal vascular growth in phase I of ROP, despite the presence of VEGF. As infants mature, rising levels of IGF-1 in phase II of ROP allows VEGF stimulated pathological neovascularization. These findings suggest that restoration of IGF-1 to normal levels might be useful in preventing ROP in preterm infants.