Intraventricular hemorrhage (IVH) is a major complication of prematurity. IVH typically initiates in the germinal matrix, which is a richly vascularized collection of neuronal-glial precursor cells in the developing brain. The etiology of IVH is multifactorial and is primarily attributed to the intrinsic fragility of the germinal matrix vasculature and the disturbance in the cerebral blood flow (CBF). Although this review broadly describes the pathogenesis of IVH, the main focus is on the recent development in molecular mechanisms that elucidates the fragility of the germinal matrix vasculature. The microvasculature of the germinal matrix is frail because of an abundance of angiogenic blood vessels that exhibit paucity of pericytes, immaturity of basal lamina, and deficiency of glial fibrillary acidic protein (GFAP) in the ensheathing astrocytes endfeet. High VEGF and angiopoietin-2 levels activate a rapid angiogenesis in the germinal matrix. The elevation of these growth factors may be ascribed to a relative hypoxia of the germinal matrix perhaps resulting from high metabolic activity and oxygen consumption of the neural progenitor cells. Hence, the rapid stabilization of the angiogenic vessels and the restoration of normal CBF on the first day of life are potential strategies to prevent IVH in premature infants.