Currently, the etiology of the serious developmental anomaly congenital diaphragmatic hernia (CDH) is unknown. We have used an animal model of CDH to address this issue. We characterized four separate teratogens that produced diaphragmatic defects in embryonic rats that are similar to those in infants with CDH. We then tested the hypothesis that all these agents share the common mechanism of perturbing the retinoid-signaling pathway. Specifically, inhibition of retinal dehydrogenase-2 (RALDH2), a key enzyme necessary for the production of retinoic acid and that is expressed in the developing diaphragm, was assayed by measuring retinoic acid production in cytosolic extracts from an oligodendrocyte cell line. The following compounds all induce posterolateral defects in the rat diaphragm; nitrofen, 4-biphenyl carboxylic acid, bisdiamine, and SB-210661. Importantly, we demonstrate that they all share the common mechanism of inhibiting RALDH2. These data provide an important component of mounting evidence suggesting that the retinoid system warrants consideration in future studies of the etiology of CDH. Congenital diaphragmatic hernia (CDH) is a serious developmental disorder occurring in ϳ1 in 3000 live births in which the diaphragm muscle fails to form completely, resulting in a hole in the diaphragm and incomplete separation of the thoracic and abdominal cavities. Lung hypoplasia and pulmonary hypertension are major pathological consequences that account for much of the morbidity and mortality of this problem.