Many patients with diabetes mellitus view subcutaneous injections of insulin as a daily burden. Pulmonary delivery of insulin offers an alternative route of administration and may as such improve diabetes treatment. Inhaled insulin provides a rapid absorption of insulin, but with low bioavailability. Phase III clinical trials in type 1 and type 2 diabetes have disclosed clinical equivalence between three inhaled insulin products (Exubera, AErx idMs, and hIIp) and regular human insulin, both in terms of glycaemic control and hypoglycaemic risk. Inhaled insulin cannot be used to replace basal insulin requirements. The most commonly reported adverse effects of inhaled insulin are cough and insulin antibody formation, the clinical significance of which is uncertain. No or minimal deterioration in pulmonary function parameters have been recorded, although studies were typically of short duration. Patients participating in inhaled insulin trials generally expressed satisfaction with the product and chose to remain on it. The availability of inhaled insulin may increase willingness in type 2 diabetic patients to consider insulin therapy. More studies of longer duration are required to determine (pulmonary) safety and cost-effectiveness of inhaled insulin, and to disclose which patients may benefit the most.