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Congenital diaphragmatic hernia (CDH) is a frequently occurring source of severe neonatal respiratory distress. It has been hypothesized that abnormal retinoid signaling contributes to the etiology of this developmental anomaly. Here, we use rodent models toward specifically understanding the role of retinoid signaling in the developing diaphragm and how its perturbation is a common mechanism in drug-induced CDH. This includes monitoring of retinoic acid (RA) response element (RARE) activation with RARE-lacZ mice, RA supplementation studies, systematic analyses of the expression profile of key elements in the RA signaling pathway within the developing diaphragm, and the in utero delivery of a RA receptor (RAR) antagonist. These data demonstrate the timing of RARE perturbation by CDH-inducing teratogens and the efficacy of RA supplementation. Furthermore, a detailed profile of retinoid binding proteins, synthetic enzymes, and retinoid receptors within primordial diaphragm cells was obtained. The expression profile of RAR-α was particularly striking in regard to its overlap with the regions of primordial diaphragm affected in multiple CDH models. Blocking of RAR signaling with the pan-RAR antagonist BMS493 induced a very high degree of CDH, with a marked left-right sidedness that depended on the timing of drug delivery. Collectively, these data demonstrate that retinoid signaling is essential for normal diaphragm development, providing further support to the hypothesis that abnormalities related to the retinoid signaling pathway cause diaphragmatic defects. This study also yielded a novel experimental model that should prove particularly useful for further studies of CDH.