The high mortality for congenital diaphragmatic hernia (CDH) has been attributed to a combination of pulmonary hypoplasia and pulmonary hypertension. We hypothesize that a surfactant deficiency may in part be contributing to the pathophysiology of CDH. This study documents the functional, quantitative, and qualitative aspects of the surfactant status of the alveolar air-liquid interface and the type II pneumocyte in the fetal lamb CDH model. Ten lamb fetuses (gestational age, 80 days) had a CDH created via a left thoracotomy and then were allowed to continue in utero development until term. Three litter mates and three nonoperated time-dated fetuses served as controls. At term, pressure-volume curves were performed to measure pulmonary compliance and total lung capacity. Alveolar lavage was then performed to measure the quantitative and the qualitative aspects of pulmonary surfactant. Finally, isolation of type II pneumocytes allowed quantification of phospholipid synthesis. When compared with controls (N = 6), the CDH lambs (N = 5) had significantly smaller lungs (P = .009), decreased total lung capacity (P less than .001) and compliance (P less than .001), reduced total lavaged phospholipids (P = .006), and decreased percent phosphatidylcholine (P = .02). CDH lambs also had increased total lavaged proteins (P = .05) and higher minimum dynamic surface tension (P less than .001). A surfactant deficiency may be contributing to the pathophysiology of CDH. Surfactant replacement therapy in premature infants has been shown to improve lung compliance, decrease morbidity, and improve survival. Exogenous surfactant may also benefit infants with CDH.