Inhalation of liposomes formulated with phospholipids similar to endogenous lung surfactants and lipids offers biocompatibility and versatility within the pulmonary medicine field to treat a range of diseases such as lung cancer, cystic fibrosis and lung infections. Manipulation of the physicochemical properties of liposomes enables innovative design of the carrier to meet specific delivery, release and targeting requirements. This delivery system offers several benefits: improved pharmacokinetics with reduced toxicity, enhanced therapeutic efficacy, increased delivery of poorly soluble drugs, taste masking, biopharmaceutics degradation protection and targeted cellular therapy. This section provides an overview of liposomal formulation and delivery, together with their applications for different disease states in the lung.