Pulmonary insulin delivery is steadily emerging as a promising solution for the treatment of diabetes mellitus. The large as well as thin absorptive area of the lungs has not been explored until now for the treatment of systemic disease like diabetes. With an understanding of the lung anatomy and physiology and the transport mechanism of insulin through lungs, diabetic treatment through the pulmonary route may well become the reality of the 21st century. Though the transport of insulin through the lungs itself appears quite encouraging, potential problems concerning the formulation of a peptide like insulin in the form of an aerosol seem to be the most challenging. Stability aspects, stringent control of Mass Median Aerodynamic Diameter, antigenicity, insulin losses due to the device and impaction, sedimentation and diffusion in the nonabsorptive areas of the airway system (especially in the oropharynx) emerge as major concerns. This is in addition to the problems of lack of reproducibility of dose delivery by an inhaler where individual variations due to inspiratory differences and method of use of device come into play. Lung diseases and smoking may alter lung mechanisms and dose alterations are to be studied in such cases. Though almost equally effective, if not more, than the subcutaneous insulin route, even with proved short-term efficacy, insulin delivery through lungs is a potential but not a wholly proven means for blood glucose control.