Inhaled therapeutic and diagnostic aerosols are examples of targeted delivery systems: they achieve high concentration in the respiratory tract (the usual target organ with these systems) while appearing in low concentrations in other parts of the human body. Development and use of inhalation aerosols requires an appreciation of the properties of these dynamic systems and the ways in which they interact with the anatomically and pathophysiologically complex human respiratory tract. The amounts of aerosol particles, or droplets, initially deposited at various sites in the respiratory tract will determine the intensity of local effects as well as the rate of clearance of these materials from the respiratory lumen. This activity can be modulated by suitable formulation intervention, such as presentation of the active agent in a slow releasing form carrier. Extension of duration of action of inhaled drugs by such means could be possible. As more discriminating methods for location of receptors and for the following of the fate of inhaled drugs and their carriers are becoming available, the ultimate potential for improvement of selective toxicity of agents used in pulmonary therapy by direct delivery into the respiratory tract can be critically evaluated.