A catheter insertion device is provided for inserting an over-the-needle catheter. The device includes an insertion needle that is retractable into the housing of the device after use to prevent exposure to the contaminated needle. A needle retainer releasably retains the needle in an extended position against the rearward bias of the biasing element. The needle retainer engages the hub of the catheter so that when the catheter is removed from the insertion device, the needle retainer automatically releases the needle. The biasing element then propels the needle rearwardly into the housing of the device. The device further allows the operator to intervene to delay retraction if desired.