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Despite advances in infant transport and intensive care, congenital diaphragmatic hernia (CDH) still poses a serious threat to life during the neonatal period. Only with the introduction of extracorporeal membrane oxygenation (ECMO) has mortality declined significantly. Understanding the pathophysiology of CDH and its devastating effect on the lungs' bronchial and vascular development assists the clinician in rational management during the perioperative period. Successful treatment demands prompt diagnosis, informed preoperative assessment and preparation, carefully timed surgical repair, and aggressive postoperative intensive care with a thorough understanding of the role of ECMO. Improvements in ventilatory support and pharmacologic management of pulmonary hypertension have allowed surgeons to delay repair until circulatory hemodynamics, electrolytes, and oxygenation can be optimized, even resorting to preoperative ECMO in selected cases if needed. Patients with severe bilateral pulmonary hypoplasia pose serious dilemmas in terms of selection for ECMO, as well as for surgical repair. Long-term follow-up of patients after CDH repair reveals persistent hypoperfusion of the involved lung but no debilitating pulmonary disease. Future therapies may include early fetal intervention or lung transplantation, although these areas remain controversial and experimental, and clinical experience is limited.