In recent years aerosol therapy has become increasingly important for the management of asthma and COPD as well as for the treatment of airway and parenchymal infections in bronchiectasis and in AIDS patients with pneumocystis carinii pneumonia. In the management of asthma inhaled steroids have become the mainstay of therapy in adults and children while bronchodilators have been relegated to a secondary role. While there has long been considerable controversy about the best way to generate and deliver aerosols, it has become evident that metered dose inhalers (MDI) and their increasingly sophisticated valved accessory devices are the most efficient, versatile and cost effective aerosol systems for the majority of patients in the adult and paediatric age group. By contrast, nebulizers are inefficient and costly and powder inhalers, while providing aerosol on inhalation, have major limitations in the paediatric age group, in less cooperative or handicapped patients and in those in emergency departments or on assisted ventilation. Recent studies have demonstrated that even in life-threatening asthma, MDI generated aerosols delivered by means of valved holding chambers are better suited to managing the acute episode because of the improved speed of administration and lower cost. Developments in aerosol therapy are likely to remain in the forefront of the management of a variety of airway and pulmonary parenchymal diseases as new and improved pharmaceutical agents and aerosol delivery systems are developed.