Paclitaxel (PTX, Taxol) has revolutionized cancer treatment in the past decade and is recognized as one of the biggest advances in oncology medicine. In spite of the good clinical efficacy shown by PTX, there is still a growing need to achieve better safety and pharmacokinetic profile of PTX in patients. The standard delivery modalities of intravenous infusion result in multiple side effects, and targeting of the drug to specific areas within the body can result in better efficacy and lower toxicity. Aerosol delivery of therapeutic agents has the potential of localizing the drugs specifically to the lung tissue, with a comparable or better pharmacokinetics as compared to intravenous, oral or intraperitoneal delivery. Aerosol delivery of PTX has not been studied extensively, however, it holds immense potential for improving the efficacy against lung tumors. Early pre-clinical studies in mice and dogs have shown good promise, both for pharmacokinetics of PTX, safety and efficacy in lung cancer models. This review looks at the still developing approach of aerosol delivery of PTX for lung cancer, documents the progress so far and the future directions that can bring this approach to clinical reality.