OBJECTIVE To determine the incidence of retinopathy of prematurity (ROP) in low birth weight premature infants admitted to the neonatal intensive care unit of a children's hospital in Kathmandu. METHODS A hospital-based prospective study was performed in neonates with a gestational age of less than 36 weeks or birth weight of less than 2,000 g during 1 year. Ophthalmologic examination was performed 2 to 4 weeks after birth and patients were observed until the retinal vascularization was complete. ROP was classified using the revised International Classification of Retinopathy of Prematurity. RESULTS A total of 78 infants fulfilled the screening criteria. ROP was detected in 29.5% (n = 23) of neonates. Thirteen infants (16.7%) had stage 1 disease and 5 each (6.4%) were found to have stage 2 and stage 3 ROP. Threshold disease was present in 3.8% (n = 3) of infants with a gestational age of less than 32 weeks and birth weight less than 1,500 g who required laser treatment per Early Treatment of ROP criteria. Low birth weight (P < .01) and low gestational age (P < .01) were significantly associated with the incidence of ROP. CONCLUSIONS Prematurity and low birth weight were found to be major risk factors for ROP. ROP screening should be performed in such infants for early detection because its incidence is likely to increase as more premature infants survive with improved neonatal care.