Intravenous tranexamic acid (TXA) has been shown to be effective in reducing blood loss and the need for transfusion after joint replacement. Recently, there has been interest in applying it topically before the closure of surgical wounds. This has the advantages of ease of application, maximum concentration at the site of bleeding, minimising its systemic absorption and, consequently, concerns about possible side-effects. We conducted a systematic review and meta-analysis which included 14 randomised controlled trials (11 in knee replacement, two in hip replacement and one in both) which investigated the effect of topical TXA on blood loss and rates of transfusion. Topical TXA significantly reduced the rate of blood transfusion (total knee replacement: risk ratio (RR) 4.51; 95% confidence interval (CI): 3.02 to 6.72; p < 0.001 (nine trials, I. 2 . = 0%); total hip replacement: RR 2.56; 95% CI: 1.32 to 4.97, p = 0.004 (one trial)). The rate of thromboembolic events with topical TXA were similar to those found with a placebo. Indirect comparison of placebo-controlled trials of topical and intravenous TXA indicates that topical administration is superior to the intravenous route. In conclusion, topical TXA is an effective and safe method of reducing the need for blood transfusion after total knee and hip replacement. Further research is required to find its optimum dose for topical use. Cite this article: Bone Joint J 2014;96-B:1005–15