Right sided congenital diaphragmatic hernia may cause biliary obstruction. We present a 2 months female infant who had respiratory distress and persistent jaundice since birth. Investigations suggested direct hyperbilirubinemia, right-sided diaphragmatic hernia with liver herniation in the thorax, and intra- and extrahepatic biliary dilatation. Laparotomy showed herniation of liver in the chest with hepatic torsion of about 180° causing obstruction of bile ducts. Liver torsion was corrected and liver relocated in the abdomen. An operative cholangiogram confirmed free passage of contrast to the intestine after correction of hepatic torsion. Repair of the diaphragmatic hernia was performed. Only skin closure was performed leaving a ventral hernia to avoid abdominal compartment syndrome. Postoperatively, the baby was kept on ventilator for 2 days and then extubated. She showed rapid recovery and was discharged in a stable condition. The ventral hernia was repaired at the age of 6 months. Her total bilirubin levels dropped gradually from 12.50 mg/dl into its normal values within 3 months.