In congenital diaphragmatic hernia (CDH) pulmonary hypoplasia is variable depending on the size of the diaphragmatic defect and the amount and timing of visceral herniation. In CDH pulmonary hypoplasia may arise from loss of lung fluid, decreased fetal breathing secondary to diaphragmatic dysfunction, and decreased intrathoracic volume. The lungs in CDH appear to be arrested in the saccular phase of development with poorly developed airspaces and thickened interalveolar septums. Pulmonary hypoplasia and decreased lung compliance contribute to the increased susceptibility to ventilation-induced lung injury seen in CDH. Persistent pulmonary hypertension of the newborn is the failure of the normal circulatory transition after birth. Four major components of surfactant proteins have been identified: surfactant protein A and D are hydrophilic and protein B and C are hydrophobic. A surfactant deficiency is clearly seen in the experimental lamb model of CDH.