We report on two children presenting at birth with respiratory failure, bilateral diaphragmatic eventration, and floppiness. Electrodiagnostic studies of the limbs, and biochemical and DNA studies excluded generalized neuromuscular diseases. Phrenic nerve electrodiagnostic studies and electromyography of the diaphragm suggested isolated diaphragm hypoplasia. Diaphragm muscle biopsy showed a paucity of muscle fibers. Isolated hypoplasia of the diaphragm is a rare cause of neonatal respiratory failure, which may have a favorable outcome with long-term ventilatory support.