Dry powder inhalation has good potential to be an alternative route of drug administration, especially for the treatment of lung and systemic diseases. However, typically only a small fraction of the dose can be delivered to the lower airways. Continuous effort on the drug formulation is undergoing to improve the deep lung deposition. Key properties of the drug and carrier particles and their relationships with the particle dispersibility and deposition properties in the lung are discussed individually. Some recent drug formulation techniques for dry powder inhalation are also reviewed.