Purpose: Perioperative blood transfusion (PBT) has been inconsistently associated with adverse outcomes. Bladder cancer patients are unique as they frequently undergo neoadjuvant chemotherapy (NAC) with resulting immunosuppression, which may be exacerbated by transfusion-related immunomodulation. We examined the effect of leukoreduced PBT on oncologic outcomes and perioperative morbidity in radical cystectomy (RC) patients who received NAC, quantifying exposure with a novel dose-index variable. Methods: The Johns Hopkins Radical Cystectomy database was queried for patients who had undergone NAC followed by RC from 2010 to 2013. Overall, 119 patients had available PBT and survival data. A multivariable Cox model evaluated risk factors, including pathologic stage, Charlson Comorbidity Index, age, race, year of surgery, surgical margin status, PBT, and preoperative hemoglobin for bladder cancer-specific survival (CSS) and overall survival (OS). Logistic regression models determined factors that were independently associated with perioperative morbidity. Results: Median follow-up was 7.8 months (range 0.2–41.8), and during follow-up there were 25 deaths and 21 cancer deaths. PBT significantly predicted OS (hazard ratio [HR] 1.26, 95 % confidence interval [CI] 1.07–1.49; p = 0.005), CSS (HR 1.32, 95 % CI 1.11–1.57; p = 0.002), and morbidity (odds ratio [OR] 1.67, 95 % CI 1.26–2.21; p = 0.004) in univariate analyses. In multivariable models, PBT was significantly associated with morbidity (OR 1.77, 95 % CI 1.30–2.39; p = 0.0002), but not OS or CSS. Intraoperative transfusion was associated with decreased OS and CSS, and increased morbidity, whereas postoperative transfusion was only associated with increased morbidity. Conclusions: Intraoperative blood transfusion was associated with increased perioperative morbidity and worsened OS and CSS in patients undergoing RC who had NAC. Although PBT may be life-saving in certain patients, a restrictive transfusion strategy may improve outcomes.