Growing attentions have been paid to the pulmonary route for systemic delivery of peptide and protein drugs, such as insulin. Advantages of this non-injective route include rapid drug deposition in the target organ, fewer systemic side effects and avoiding first pass metabolism. However, sustained release formulations for pulmonary delivery have not been fully exploited till now. In our study, a novel dry powder inhalation (DPI) system of insulin loaded solid lipid nanoparticles (Ins-SLNs) was investigated for prolonged drug release, improved stability and effective inhalation. Firstly, the drug was incorporated into the lipid carriers for a maximum entrapment efficiency as high as 69.47 +/- 3.27% (n = 3). Secondly, DPI formulation was prepared by spray freeze drying of Ins-SLNs suspension, with optimized lyoprotectant and technique parameters in this procedure. The properties of DPI particles were characterized for their pulmonary delivery potency. Thirdly, the in vivo study of intratracheal instillation of Ins-SLNs to diabetic rats showed prolonged hypoglycemic effect and a relative pharmacological bioavailability of 44.40% could be achieved in the group of 8 IU/kg dosage. These results indicated that SLNs have shown increasing potential as an efficient and non-toxic lipophilic colloidal drug carrier for enhanced pulmonary delivery of insulin.