Aquaporins (AQPs) are involved in hypoxia-induced angiogenesis and retinal damage. Bumetanide is a diuretic agent, Na⁺/K⁺/Cl⁻ cotransporter (NKCC1), and AQP 1–4 inhibitor. We tested the hypothesis that early postnatal treatment with bumetanide suppresses biomarkers of angiogenesis and decreases severe retinopathy oxygen-induced retinopathy (OIR). Neonatal rats were exposed at birth (P0) to either (1) room air (RA); (2) hyperoxia (50% O₂); or (3) intermittent hypoxia (IH) consisting of 50% O₂ with brief, clustered episodes of 12% O₂ from P0 to postnatal day 14 (P14), during which they were treated intraperitoneally (IP) with bumetanide (0.1 mg/kg/day) or an equivalent volume of saline, on P0–P2. Pups were examined at P14 or allowed to recover in RA from P14–P21. Retinal angiogenesis, morphometry, pathology, AQPs, and angiogenesis biomarkers were determined at P14 and P21. Bumetanide reduced vascular abnormalities associated with severe OIR. This was associated with reductions in AQP-4 and VEGF. Bumetanide suppressed sVEGFR-1 in the serum and vitreous fluid, but levels were increased in the ocular tissues during recovery. Similar responses were noted for IGF-I. In this model, early systemic bumetanide administration reduces severe OIR, the benefits of which appear to be mediated via suppression of AQP-4 and VEGF. Further studies are needed to determine whether bumetanide at the right doses may be considered a potential pharmacologic agent to treat retinal neovascularization.