The diagnosis of congenital diaphragmatic hernia (CDH) is associated with significant morbidity and mortality. Survival of neonates with CDH has improved recently, although the clinical course is complicated by sequelae of hypoplastic pulmonary parenchyma and vasculature, pulmonary hypertension, ventilation/perfusion (V/Q) mismatch, reduced pulmonary function and poor somatic growth. In this case report, we describe an infant with an antenatal diagnosis of CDH with a poor prognosis who underwent initial surgery followed by a tracheostomy but had a worsening clinical course due to a large area of ventilated but poorly perfused lung based on a V/Q nuclear scintigraphy scan. The emphysematous left lung was causing mediastinal shift and compression of the right lung, further compromising gas exchange. The infant had clinical improvement following bronchial blockade of the under-perfused left lung. This paved the way for further management with resection of the under-perfused lung lobe and continued clinical improvement. We present the novel use of selective bronchial blockade in a challenging case of CDH to determine if surgical lung resection may benefit the infant. We also review the physiology of gas exchange during the use of a bronchial occluder and the relevant literature.