The most accurate method of diagnosis is prenatal screening through real-time fetal images. However, since maternal body habitus leads to diagnostic difficulties using this method, MRI and sonography are the most commonly used technique since there is no exposure to ionizing radiation. At the beginning of the second trimester, the central nervous system (CNS) and anatomic structures of the fetus can be clearly visualized and the characteristic malformations of iniencephaly, such as a shortened trunk, marked lordosis in the cervicothoracic vertebrae, absence or partial absence of the occipital squama, abnoramal fusion of vertebrae, closed vertebral arches, formation of an encephalocele (for iniencephaly apertus), and dorsiflexion of the head in respect to the spine, can be precisely diagnosed as well as the severity and location established. Once established, further decisions can be made with regard to terminating the pregnancy or providing a plan of adequate postnatal care.

Since many of the characteristics of iniencephaly, such as congenital retroflexion of the spine and fusion of the cervical vertebrae, are shared with other disorders, key differences are important to note.

While anencephaly experiences a partial to total lack of the neurocranium, iniencephaly does not. In anencephaly, the retroflexed head is not covered with skin while in iniencephaly, the retroflexed head is covered with skin entirely. Cervical vertebrae are malformed and reduced in iniencephaly while they are almost normal in anencephaly.

Even though KFS does experience malformed cervical vertebra due to failure of segmentation during early fetal development, there is not retroflexion of the head as seen in iniencephaly. While iniencephaly clausus is fatal, KFS is not and can be surgically corrected. Therefore, it is crucial to correctly diagnose KFS and not mistake it for iniencephaly clausus.

Rachischisis (Greek: "rhachis - ῥάχις" - spine, and "schisis - σχίσις" - split) is a developmental birth defect involving the neural tube. This anomaly occurs in utero, when the posterior neuropore of the neural tube fails to close by the 27th intrauterine day. As a consequence the vertebrae overlying the open portion of the spinal cord do not fully form and remain unfused and open, leaving the spinal cord exposed. Patients with rachischisis have motor and sensory deficits, chronic infections, and disturbances in bladder function. This defect often occurs with anencephaly.

Craniorachischisis is a variant of rachischisis that occurs when the entire spinal cord and brain are exposed - simultaneous complete rachischisis and anencephaly. It is incompatible with life; affected pregnancies often end in miscarriage or stillbirth. Infants born alive with craniorachischisis die soon after birth.