Neovascularization is a hallmark feature of retinopathy of prematurity and diabetic retinopathy. Type 1 angiotensin receptor blockade reduces neovascularization in experimental retinopathy of prematurity, known as oxygen-induced retinopathy (OIR). We investigated in OIR whether inhibiting aldosterone with the aldosterone synthase inhibitor FAD286 reduced neovascularization as effectively as angiotensin receptor blockade (valsartan). OIR was induced in neonatal Sprague-Dawley rats, and they were treated with FAD286 (30 mg/kg per day), valsartan (10 mg/kg per day), or FAD286+valsartan. The cellular sources of aldosterone synthase, the mineralocorticoid receptor, and 11β-hydroxysteroid dehydrogenase 2 were evaluated in retinal cells involved in neovascularization (primary endothelial cells, pericytes, microglia, ganglion cells, and glia). In OIR, FAD286 reduced neovascularization and neovascular tufts by 89% and 67%, respectively, and normalized the increase in vascular endothelial growth factor mRNA (1.74-fold) and protein (4.74-fold) and was as effective as valsartan and FAD286+valsartan. In retina, aldosterone synthase mRNA was reduced with FAD286 but not valsartan. Aldosterone synthase was detected in microglia, ganglion cells, and glia, whereas mineralocorticoid receptor and 11β-hydroxysteroid dehydrogenase 2 were present in all of the cell types studied. Given the location of aldosterone synthase in microglia and their contribution to retinal inflammation and neovascularization in OIR, the effects of FAD286 on microglial density were studied. The increase in microglial density (ionized calcium binding adaptor protein 1 immunolabeling) in OIR was reduced with all of the treatments. In OIR, FAD286 reduced the increase in mRNA for tumor necrosis factor-α, intercellular adhesion molecule 1, vascular cell adhesion molecule 1, and monocyte chemoattractant molecule 1. These findings indicate that aldosterone inhibition may be a potential treatment for retinal neovascularization.