Retinopathy of prematurity (ROP) is the leading cause of blindness in infants. We have investigated the efficacy of the secondary bile acid ursodeoxycholic acid (UDCA) and its taurine and glycine conjugated derivatives tauroursodeoxycholic acid (TUDCA) and glycoursodeoxycholic acid (GUDCA) in preventing retinal neovascularization (RNV) in an experimental model of ROP. Seven-day-old mice pups (P7) were subjected to oxygen-induced retinopathy (OIR) and were treated with bile acids for various durations. Analysis of retinal vascular growth and distribution revealed that UDCA treatment (50 mg/kg, P7–P17) of OIR mice decreased the extension of neovascular and avascular areas, whereas treatments with TUDCA and GUDCA showed no changes. UDCA also prevented reactive gliosis, preserved ganglion cell survival, and ameliorated OIR-induced blood retinal barrier dysfunction. These effects were associated with decreased levels of oxidative stress markers, inflammatory cytokines, and normalization of the VEGF–STAT3 signaling axis. Furthermore, in vitro tube formation and permeability assays confirmed UDCA inhibitory activity toward VEGF-induced pro-angiogenic and pro-permeability effects on human retinal microvascular endothelial cells. Collectively, our results suggest that UDCA could represent a new effective therapy for ROP.