Congenital diaphragmatic hernia (CDH) is a common life-threatening birth defect. Recessive mutations in the FRAS1-related extracellular matrix 1 (FREM1) gene have been shown to cause bifid nose with or without anorectal and renal anomalies (BNAR) syndrome and Manitoba oculotrichoanal (MOTA) syndrome, but have not been previously implicated in the development of CDH. We have identified a female child with an isolated left-sided posterolateral CDH covered by a membranous sac who had no features suggestive of BNAR or MOTA syndromes. This child carries a maternally-inherited ~86 kb FREM1 deletion that affects the expression of FREM1's full-length transcripts and a paternally-inherited splice site mutation that causes activation of a cryptic splice site, leading to a shift in the reading frame and premature termination of all forms of the FREM1 protein. This suggests that recessive FREM1 mutations can cause isolated CDH in humans. Further evidence for the role of FREM1 in the development of CDH comes from an N-ethyl-N-nitrosourea -derived mouse strain, eyes2, which has a homozygous truncating mutation in Frem1. Frem1(eyes2) mice have eye defects, renal agenesis and develop retrosternal diaphragmatic hernias which are covered by a membranous sac. We confirmed that Frem1 is expressed in the anterior portion of the developing diaphragm and found that Frem1(eyes2) embryos had decreased levels of cell proliferation in their developing diaphragms when compared to wild-type embryos. We conclude that FREM1 plays a critical role in the development of the diaphragm and that FREM1 deficiency can cause CDH in both humans and mice.