Pharmaceutical aerosol delivery is undergoing dramatic changes in both inhaler device and formulation aspects. There is a rapid move from the traditional propellant-driven metered dose inhalers to the high performance liquid atomizers and dry powder inhalers (DPIs). DPIs involving the dispersion of powders into aerosols by an inhaler device are particularly attractive as dry powders generally have greater chemical stability than liquids used in atomizers. Delivery of therapeutic proteins as dry powder aerosols is of high commerical interest. However, production and formulation of dry powders for inhalation can be difficult and challenging due to the potential physical instability of the powder. Dry powders consisting of micro- or nano-sized particles are inherently adhesive and cohesive, leading to highly variable dose accuracy and poor aerosol performance. Particle engineering via the use of appropriate pharmaceutical excipients and processing parameters can produce particles of optimal morphologies and surface properties which would enhance aerosol generation. Some of the key determinants for successful dispersion of pharmaceutical powders suitable for inhalation are reviewed with an emphasis on the practical significance.