Congenital diaphragmatic hernia (CDH) is a developmental disorder associated with diaphragm defects and lung hypoplasia. The etiology of CDH is complex and its clinical presentation is variable. We investigated the role of the pulmonary mesothelium in dysregulated lung growth noted in the Wt1 knockout mouse model of CDH. Loss of WT1 leads to intrafetal effusions, altered lung growth, and branching defects prior to normal closure of the diaphragm. We found significant differences in key genes; however, when Wt1 null lungs were cultured ex vivo, growth and branching were indistinguishable from wild-type littermates. Micro-CT imaging of embryos in situ within the uterus revealed a near absence of space in the dorsal chest cavity, but no difference in total chest cavity volume in Wt1 null embryos, indicating a redistribution of pleural space. The altered space and normal ex vivo growth suggest that physical constraints are contributing to the CDH lung phenotype observed in this mouse model. These studies emphasize the importance of examining the mesothelium and chest cavity as a whole, rather than focusing on single organs in isolation to understand early CDH etiology.