The newborn infant with a congenital diaphragmatic hernia (CDH) who develops severe respiratory distress requiring operative repair within the first 24 hours of life represents one of the most challenging problems in pediatric surgery. The mortality in these infants still exceeds 50% and has historically been attributed to ventilatory insufficiency secondary to pulmonary hypoplasia. However, the primary abnormality in these neonates seems to be an increase in pulmonary vascular resistance with an elevation of pulmonary artery pressure, right-left ductal shunting, preductal shunting and progressive hypoxemia. Eighteen neonates with a CDH were operated upon within the first 24 hours of life with a mortality of 38%. In no instance did ventilatory insufficiency seem to be a major factor in the death of the patient. Seven infants with progressive hypoxemia were treated with a vasodilator, tolazoline. Six of the seven infants showed an initial response to treatment, with a rise in preductal PaO2 and a decrease in ductal shunting. Four of these seven desperately ill neonates survived. Pathologic examination of the pulmonary vasculature in the non-survivors revealed an increase in muscle mass within the pulmonary arterioles. An exaggerated vasoconstrictive response of an abnormally hypertrophied pulmonary vascular bed leading to an elevation of pulmonary vascular resistance, rather than abnormalities of ventilation, appears to be the important mechanism leading to the often fatal hypoxemia observed in the neonate with a CDH. Improved survival will depend upon the successful management of the deranged pulmonary vascular hemodynamics seen in these infants.