Congenital diaphragmatic hernia (CDH) is a common (1 in 3,000 live births) major congenital malformation that results in significant morbidity and mortality. The discovery of CDH loci using standard genetic approaches has been hindered by its genetic heterogeneity. We hypothesized that gene expression profiling of developing embryonic diaphragms would help identify genes likely to be associated with diaphragm defects. We generated a time series of whole-transcriptome expression profiles from laser captured embryonic mouse diaphragms at embryonic day (E)11.5 and E12.5 when experimental perturbations lead to CDH phenotypes, and E16.5 when the diaphragm is fully formed. Gene sets defining biologically relevant pathways and temporal expression trends were identified by using a series of bioinformatic algorithms. These developmental sets were then compared with a manually curated list of genes previously shown to cause diaphragm defects in humans and in mouse models. Our integrative filtering strategy identified 27 candidates for CDH. We examined the diaphragms of knockout mice for one of the candidate genes, pre-B-cell leukemia transcription factor 1 (Pbx1), and identified a range of previously undetected diaphragmatic defects. Our study demonstrates the utility of genetic characterization of normal development as an integral part of a disease gene identification and prioritization strategy for CDH, an approach that can be extended to other diseases and developmental anomalies.