Hyperglycemia in early postnatal life of preterm infants with incompletely vascularized retinas is associated with increased risk of potentially blinding neovascular retinopathy of prematurity (ROP). Neovascular ROP (Phase II ROP) is a compensatory but ultimately pathological response to the suppression of physiological postnatal retinal vascular development (Phase I ROP). Hyperglycemia in neonatal mice which suppresses physiological retinal vascular growth is associated with decreased expression of systemic and retinal fibroblast growth factor 21 (FGF21). FGF21 administration promoted and FGF21 deficiency suppressed the physiological retinal vessel growth. FGF21 increased serum adiponectin (APN) levels and loss of APN abolished FGF21 promotion of physiological retinal vascular development. Blocking mitochondrial fatty acid oxidation also abolished FGF21 protection against delayed physiological retinal vessel growth. Clinically, preterm infants developing severe neovascular ROP (versus non-severe ROP) had a lower total lipid intake with more parenteral and less enteral during the first 4 weeks of life. Our data suggest that increasing FGF21 levels in the presence of adequate enteral lipids may help prevent Phase I retinopathy (and therefore prevent neovascular disease).Supplementary InformationThe online version contains supplementary material available at 10.1007/s10456-023-09872-x.