Necrotizing enterocolitis (NEC) is the most common life threatening condition affecting preterm infants. NEC occurs in 1-5% of all neonatal intensive care admissions and 5-10% of very low birth weight infants. The protective role of human breast milk (BM) has been well established. It has also been shown that amniotic fluid (AF) and BM have many similarities in terms of presence of growth and other immune-modulatory factors. This finding led to the initial hypothesis that AF may exert similar protective effects against the development of NEC, as does BM. Multiple studies have elucidated the presence of growth factors in AF and the protective effect of AF against NEC. Studies have also described possible mechanisms how AF protects against NEC. At present, research in this particular area is extremely active and robust. This review summarizes the various studies looking at the protective effects of AF against the development of NEC. It also provides an insight into future directions, the vast potential of AF as a readily available biologic medium, and the ethical barriers that must be overcome before using AF.