Inhaled insulin offers a novel option for controlling blood glucose levels in type 1 and type 2 diabetes, obviating the need for multiple daily injections. The first of several delivery systems, insulin Exubera, was recently approved by the US Food and Drug Administration (FDA). However, questions remain regarding its efficacy, cost-effectiveness, and possible deleterious effects on pulmonary function. This review will discuss the pharmacology, efficacy, important clinical trials, and practical aspects of inhaled insulin, and potential concerns associated with its use.