Background: Tranexamic acid (TXA) is one of the agents used to reduce perioperative bleeding during total knee replacement. However, there is no consensus or guidelines for its use in our environment. Objective: We assessed the effectiveness of intravenous TXA compared to placebo for reducing blood loss and blood transfusion requirements in total knee replacement (TKR). Methods: This prospective, randomized, double-blind study was conducted at our regional hospital between January 2016 and June 2017. Patients with severe osteoarthritis scheduled to undergo TKR were randomly allocated to the placebo and TXA groups. Intraoperative blood loss (IBL), postoperative blood loss (PBL), total blood loss (TBL), hemoglobin (Hb) drop, and transfusion rates were compared between the two groups. Results: A total number of 72 patients (98 knees) were randomized to two groups. Thirty-six patients (52 knees) in the placebo group and the remaining 36 patients (46 knees) were randomized in TXA group. The baseline demographic data were similar in both groups [Table 1]. The mean IBL, PBL, and TBL in TXA group (187.7 +/- 46.2 mL, 334.4 +/- 85.9 mL and 574.3 +/- 102.1 mL) were significantly lower than those in the placebo group (344.3 +/- 89.0 mL, P < 0.001; 628.0 +/- 197.4 mL, P < 0.001; and 946.5 +/- 152.3 mL, P < 0.001) [Table 2]. The mean Hb drop was lower in TXA group compared to placebo (P < 0.001). The transfusion rate in TXA group was significantly lower when compared to placebo (P = 0.03). Conclusion: Intravenous TXA is effective in reducing perioperative bleeding, hemoglobin loss, and blood transfusion requirements in TKR.