Since 1925, when the concept of treating diabetes with inhaled insulin (INH) was originally published, a number of clinical challenges have been resolved through technological advancements. Efforts by pharmaceutical partnerships or individual companies have resulted in the development of both injection-free devices and novel insulin formulations. Four different INH systems are now in phase 3 of clinical development, and several other INH systems are in earlier stages of clinical study. Clinical data consistently demonstrate that INH therapy is comparable to subcutaneous (SC) therapy in improving glycaemic control in patients with either type 1 or type 2 diabetes, generally without greater risk of overall hypoglycaemia. INH is generally well tolerated and appears to be safe. Adverse-event profiles for INH therapies are similar to SC insulin therapy, with the majority of events being reported as being mild to moderate. Long-term safety studies are ongoing, with emphasis on evaluating the impact of INH therapy on pulmonary function and immune responses. Although small, reversible decreases in pulmonary diffusion capacity (DL(co)) and FEV1 have been reported in response to INH, pulmonary function and structure do not appear to be affected in any clinically significant way. While insulin antibodies are increased in INH therapy, these antibodies have not been correlated with haemoglobin A1c (HbA1c), insulin dosage, hypoglycaemia, pulmonary function or adverse events. Nevertheless, properly controlled, long-term studies will best answer any remaining concerns. From the patient's perspective, INH therapy is preferred by the majority of patients over conventional SC insulin therapy. Studies have shown that patients prefer INH therapy, because it provides greater lifestyle flexibility and social acceptability while at the same time avoiding the pain associated with injection. Thus, after more than 80 years during which the injection route has been the only means of administering insulin, patients and physicians may soon avail themselves of another valuable tool in management of diabetes.