Retinopathy of prematurity (ROP) is a leading cause of childhood blindness worldwide, primarily affecting preterm and low birth weight infants. While gestational age and birth weight are established risk factors, the contribution of antenatal factors, particularly placental dysfunction (PD), remains less clearly defined. This study aimed to evaluate the association between PD during pregnancy and the development of severe ROP in preterm newborn. A prospective observational cohort study was conducted among 432 preterm infants (<34 weeks and/or < 2000 gm. admitted to a tertiary care NICU. Placental dysfunction was defined as the presence of preeclampsia, intrauterine growth restriction (IUGR), placental abruption, or abnormal Doppler studies. Infants were categorized into PD and non-PD groups. Ophthalmological screening for ROP was performed as per International Classification of ROP (ICROP) guidelines. The primary outcome was severe ROP (stage ≥ 3 or requiring treatment). Data were analyzed using chi-square tests, relative risk estimation, and multivariate logistic regression adjusting for gestational age and birth weight. Out of 432 infants, 96 (22.2%) were born to mothers with PD and 336 (77.8%) without PD. Severe ROP occurred in 18 (18.8%) of the PD group versus 19 (5.7%) of the non-PD group. The incidence of severe ROP was significantly higher in the PD group (χ2 = 14.22, p < 0.001). Infants with PD had a 3.3-fold increased risk of severe ROP (RR = 3.29, 95% CI: 1.75–6.20). Logistic regression analysis showed that PD remained an independent predictor after adjusting for confounders (adjusted OR = 2.94, 95% CI: 1.48–5.84, p = 0.002).Placental dysfunction is significantly and independently associated with the development of severe ROP in preterm infants. These findings suggest that maternal-placental health should be incorporated into ROP risk stratification models, enabling early identification of high-risk neonates and guiding timely ophthalmological interventions.