Retinopathy of prematurity (ROP) is a leading cause of blindness in children worldwide due to increasing survival rates of premature infants. Initial suppression, followed by increased production of the retinal vascular endothelial growth factor-A (VEGF) expression are key events that trigger the pathological neovascularization in ROP. Fatty acid binding protein 4 (FABP4) is an intracellular lipid chaperone that is induced by VEGF in a subset of endothelial cells. FABP4 exhibits a pro-angiogenic function in cultured endothelial cells and in airway microvasculature, but whether it plays a role in modulation of retinal angiogenesis is not known. We hypothesized that FABP4 deficiency could ameliorate pathological retinal vascularization and investigated this hypothesis using a well-characterized mouse model of oxygen-induced retinopathy (OIR). We found that FABP4 was not expressed in retinal vessels, but was present in resident macrophages/microglial cells and endothelial cells of the hyaloid vasculature in the immature retina. While FABP4 expression was not required for normal development of retinal vessels, FABP4 expression was upregulated and localized to neovascular tufts in OIR. FABP4-/- mice demonstrated a significant decrease in neovessel formation as well as a significant improvement in physiological revascularization of the avascular retinal tissues. These alterations in retinal vasculature were accompanied by reduced endothelial cell proliferation, but no effect on apoptosis or macrophage/microglia recruitment. FABP4-/- OIR samples demonstrated decreased expression of genes involved in angiogenesis, such as Placental Growth Factor, and angiopoietin 2. Collectively, our findings suggest FABP4 as a potential target of pathologic retinal angiogenesis in proliferative retinopathies.