Hypoxic injury, including that resulting in the retinopathy of prematurity, may induce retinal ganglion cell (RGC) death in the neonatal retina. We hypothesized that this may be mediated by excess production of tumour necrosis factor‐α (TNF‐α) and interleukin‐1β (IL‐1β) by microglia. One‐day‐old Wistar rats were subjected to hypoxia for 2 h and the expression of TNF‐α and IL‐1β and their receptors was determined in the retina. The mRNA and protein expression of TNF‐α, IL‐1β, TNF‐receptor 1 (TNF‐R₁), and IL‐1 receptor 1 (IL‐1R₁) and the tissue concentration of TNF‐α and IL‐1β were up‐regulated significantly after the hypoxic exposure. TNF‐α and IL‐1β immunoreactivity was localized in microglial cells, whereas that of TNF‐R₁ and IL‐1R₁ was restricted to RGCs, as confirmed by double immunofluorescence labelling. Along with this, increased expression of monocyte chemoattractant protein‐1 and its receptor CCR2 was detected in the microglia. Primary cultured microglia subjected to hypoxia showed enhanced release of TNF‐α and IL‐1β. Primary cultured retinal ganglion cells (RGCs) treated with conditioned medium derived from hypoxic microglia showed enhanced apoptosis, which was significantly reduced when the cells were treated with microglia conditioned medium neutralized with TNF‐α/IL‐1β antibody. Our results suggest that activated microglial cells in hypoxic neonatal retina produce increased amounts of TNF‐α and IL‐1β that could induce RGC death. Copyright © 2011 Pathological Society of Great Britain and Ireland. Published by John Wiley & Sons, Ltd.