The diabetes epidemic and lack of adequate glycemic control in patients with diabetes emphasize the need for alternative diabetes treatment strategies. Although many new compounds have been developed, insulin remains the most potent agent for controlling glycemia. Inhaled insulin systems have been developed to alleviate the fear of insulin injections and to improve the convenience of insulin administration. The AIR Inhaled Insulin System being developed by Eli Lilly (Indianapolis, IN) and Alkermes (Cambridge, MA) uses AIR particle technology to deliver dry powder insulin to the deep lung. Pharmacokinetic and glucodynamic data in Phase 1 clinical trials have demonstrated that AIR Insulin is rapidly absorbed with prolonged insulin exposure and action compared to insulin lispro. AIR Insulin has also been shown to have dose equivalence and dose reproducibility across a range of doses, and it has been shown that three inhalations of the 2 U-equivalent dose can be interchanged with one 6 U-equivalent dose. A Phase 2 study demonstrated preference for AIR Insulin over subcutaneous injectable insulins, and a recent study reported that the system is easy to teach and use. Several Phase 3 studies are currently underway to further investigate the safety and efficacy and to evaluate the system's intention to meet provider and patient expectations.