The pharmacokinetics and pharmacodynamics of a novel liposomal amikacin for inhalation were evaluated in cystic fibrosis patients with chronic pseudomonas infection. Twenty-four patients from two studies received 500 mg of liposomal amikacin by inhalation once daily for 14 days. Serum, sputum, and 24-h urine samples were collected on days 1 and 14 of therapy; pulmonary function tests (PFT) and sputum for quantitative microbiology were assessed at baseline and serially for 14 days. Relationships between amikacin exposure in serum and sputum and absolute change in PFT endpoints and log10 CFU of Pseudomonas aeruginosa from baseline on days 7 and 14 of therapy were assessed. On days 7 and 14, absolute change from baseline in forced expiratory volume in 1 s (FEV1), percent predicted forced expiratory volume in 1 s (FEV1 % predicted), and forced expiratory flow between 25 and 75% of forced vital capacity (FEF(25-75%)) increased by 0.24 (P = 0.002) and 0.13 (P = 0.10) liters, 7.49 (P < 0.001) and 4.38 (P = 0.03), and 0.49 (P < 0.001) and 0.42 (P = 0.02) liters/s, respectively. In addition, relative change from baseline in FEV1 % predicted was 10.8% (P < 0.001) and 5.62% (P = 0.073) on days 7 and 14, respectively. While significant relationships between absolute change in PFT endpoints and the ratio of serum or sputum area under the concentration-time curve to the MIC (AUC/MIC) were not observed, relationships between change in log10 CFU and serum AUC/MIC ratio and change in log10 CFU and absolute changes in all PFT endpoints were significant. Together, these findings likely represent drug effect and warrant the further development of liposomal amikacin for inhalation.