Background: Retinopathy of prematurity (ROP) is a vaso-proliferative disorder of the immature retina and a leading cause of preventable childhood blindness. Multiple risk factors have been implicated in its development, including oxygen therapy, sepsis and blood transfusion. Objective: This study was conducted to determine the association between blood transfusion and ROP among preterm neonates and to assess the effect of early erythropoietin (EPO) administration on anemia correction and transfusion requirement. Methods: This randomized controlled trial was conducted in the Special Care Baby Unit (SCABU) and Neonatal Intensive Care Unit (NICU) of Dhaka Shishu (Children) Hospital from July 2018 to June 2020. A total of 60 preterm low-birth-weight neonates (<34 weeks gestation, <1800 gm birth weight) were enrolled and randomly allocated into two groups: the EPO group (n=30) and the control group (n=30). The EPO group received recombinant human erythropoietin (400 IU/kg subcutaneously, thrice weekly for two weeks), along with oral iron and folic acid supplementation. Hematologic parameters, blood transfusion requirements and ROP development were evaluated and compared between groups. Results: EPO administration significantly increased hemoglobin, hematocrit and reticulocyte counts and reduced the need for blood transfusion (23.3% vs. 53.3%; p= 0.017). The overall incidence of ROP did not differ significantly between the groups (26.7% vs. 36.7%; p= 0.405). However, a strong association was observed between blood transfusion and ROP development (p= 0.026). Conclusion: Early erythropoietin therapy effectively reduced blood transfusion requirements without increasing ROP risk. Blood transfusion was significantly associated with ROP development, suggesting that restrictive transfusion strategies and early anemia management may help reduce ROP incidence among preterm neonates.