Life-threatening congenital diaphragmatic hernia (CDH) is a defect with subsequent herniation of abdominal organs. Herniation of abdominal organs into the thoracic cavity causes pulmonary hypoplasia and hypertension. Despite improved baby critical care and surgical therapy, severe CDH has high mortality and morbidity rates. The prenatal intervention of fetoscopic endoluminal tracheal occlusion (FETO) has become popular for improving postnatal survival and lung development. However, its efficacy in reducing maternal risks, morbidity, and improving newborn survival is still debated. This systematic study compares FETO with expectant management of mothers on neonatal and maternal outcomes. A PICO-based systematic review was conducted. The study included fetuses with severe or moderate CDH. The intervention group had FETO, while the control group had expectant management with postnatal surgery. Neonatal survival, morbidity, and maternal problems were evaluated. A complete PubMed, OpenAlex, and CENTRAL search yielded 669 records. Forty papers met Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) eligibility criteria after deleting 154 duplicates, screening 515 abstracts, and analyzing 102 full-text articles. RCTs, cohort studies, and retrospective analyses were conducted. The data were extracted after title and abstract screening, followed by full-text screening using inclusion and exclusion criteria. Statistical analyses were then performed using RStudio (Posit PBC, Boston, MA, USA) to assess morbidity patterns, maternal risk factors, and pooled survival rates. Pooled analyses suggest that FETO may be associated with improved survival in severe CDH cases with liver herniation compared to expectant management. Some studies report noticeably higher survival rates with FETO, though others have shown the opposite trend, possibly reflecting differences in patient selection criteria. FETO has also been associated with higher incidences of pulmonary hypertension, prolonged ventilatory support, and increased risk of gastrointestinal complications such as feeding difficulties, gastroesophageal reflux, and reherniation. The impact of FETO on extracorporeal membrane oxygenation requirements appears inconsistent across studies, with some indicating a reduced need and others reporting similar rates regardless of intervention. A notable concern with FETO is its association with increased risks of preterm premature rupture of membranes (PPROM) and preterm delivery. PPROM has been reported in nearly half of FETO cases, compared to lower rates in expectant management. Correspondingly, gestational age at delivery tends to be earlier in FETO pregnancies, potentially contributing to lower birth weights and higher rates of neonatal intensive care unit admission. Serious maternal complications, such as hemorrhage, sepsis, or organ injury, are infrequently reported. FETO improves survival in severe CDH cases; however, this systematic analysis demonstrates that treatment increases neonatal morbidity and maternal morbidity. The findings highlight the importance of precise patient selection to maximize benefits and minimize risks. Clinically, FETO should be reserved for severe CDH cases in which the survival benefits outweigh the problems. Future research should focus on standardizing FETO procedures, enhancing postnatal care, and investigating other therapies to reduce PPROM and preterm birth risk.