Drug nebulizers should be designed to produce an aerosol which efficiently targets drug to the respiratory tract. In this article we review the basic principles of aerosol generation from both jet and ultrasonic nebulizers, and the factors governing respiratory tract penetration and deposition. We review methods for accurate measurement of aerosol dose and size, with emphasis on evaporative effects and the implications to drug nebulizer design. We identify three forms of drug aerosol waste attributable to: generation of non-respirable aerosol, losses to the environment, and dead volume solution; and we consider how each may be minimized through good nebulizer design. Finally, we compare the relative merits of jet and ultrasonic nebulizers, and conclude by predicting a new trend in future drug nebulizer therapy.