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Introduction Tranexamic acid (TXA) has been shown to be a cost-effective method for reducing blood loss and postoperative transfusions in patients undergoing total knee arthroplasty (TKA) at tertiary care centers. However, the efficacy of TXA has not been studied in community hospitals, and the potential cost savings may be especially beneficial for these institutions. The purpose of this study was to assess the effectiveness of TXA in reducing postoperative transfusions and blood loss following TKA at a community hospital. Methods Institutional approval was obtained for the retrospective review of a consecutive series of patients that underwent a total knee arthroplasty procedure between January 1, 2019, and December 31, 2019. Patients undergoing bilateral TKA were excluded from the analysis, yielding a total of 190 TKA procedures of which 131 patients received TXA. Fisher's exact test was conducted to compare rates of transfusion between the groups. A difference in difference analysis was conducted to assess TXA's effect on patient hemoglobin levels (Hgb) on postoperative Days 1 and 2. All analyses were conducted using R studio (Vienna, Austria). A p-value of 0.05 was set as the threshold for statistical significance. Results There was no difference in group characteristics in terms of age (70 years vs 68 years, p=0.17; no-TXA vs TXA, respectively). Fisher's exact test revealed no difference in the rates of allogeneic transfusion between TKA patients who did not receive a TXA and TKA patients who received a TXA (3.4% vs 0.8%; p=0.228). However, our difference in differences analysis revealed that TXA patients had a mean reduction in hemoglobin (Hgb)-related blood loss of 0.876 Hgb/dl (95% CI: 0.56 to 1.19; p<0.001) between the preoperative period and postoperative Day 1. Similarly, our difference in differences analysis revealed a mean reduction in Hgb-related blood loss of 0.972 Hgb/dl (95% CI: 0.593 to 1.349; p<0.001) between the preoperative period and postoperative Day 2. Conclusion The present study shows TXA to be effective for reducing blood loss and transfusions following TKAs performed at a small community hospital. Given the cost-savings previously reported with TXA use, as well as the medical benefits reported in this study, TXA may have a niche in small community hospitals where cost savings from reduced transfusions and shorter hospital stays are important. Further studies should assess the exact amount of financial savings from TXA utilization in small community hospitals.