Perioperative bleeding and postsurgical hemorrhage are common in invasive surgical procedures, including orthopedic surgery. Tranexamic acid (TXA) is a pharmacologic agent that acts through an antifibrinolytic mechanism to stabilize formed clots and reduce active bleeding. It has been used successfully in orthopedics to reduce perioperative blood loss, particularly in total hip and knee arthroplasty and spine surgery. Numerous research studies have reported favorable safety and efficacy in orthopedic cases, although there is no universal standard on its administration and its use has not yet become the standard of practice. Reported administration methods often depend on the surgeon's preference, with both topical and intravenous routes showing efficacy. The type and anatomic site of the surgery seem to influence the decision making but also result in conflicting opinions. Reported complication rates with TXA use are low. The incidence of both arterial and venous thromboembolic events, particularly deep venous thrombosis and pulmonary embolism, has not been found to be significantly different with TXA use for healthy patients. The route of administration and dosage do not appear to affect complication rates either. However, data on patients with higher-risk conditions are deficient. In addition, TXA has shown potential to reduce blood loss, transfusion rates and volumes, perioperative hemoglobin change, and hospital-related costs at various degrees among the published studies. Conservation of blood products, reduced laboratory costs, and shorter hospital stays are likely the major factors driving the cost savings associated with TXA use. This article reviews current data supporting the safety, efficacy, and cost-effectiveness of TXA in orthopedic surgery.