Postpartum hemorrhage (PPH) continues to be a serious complication in both developed and underdeveloped countries. It remains the leading cause of maternal mortality in underdeveloped countries. Implementation of the World Health Organization guidelines of PPH treatment has reduced mortality. In addition, the prophylactic administration of tranexamic acid with uterotonic agents may contribute to the reduction of PPH. This evidence-based literature review of tranexamic acid will examine its mechanism of action as well as its effectiveness in prevention of PPH and blood loss reduction in elective surgery, obstetrics, and trauma.