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The majority of approved drug products comprise formulations of either chemically synthesized small molecules or large molecular entities derived from living cells, commonly referred to as biologics. Over the past two decades, there has been remarkable growth in the approval of biologics for a variety of disorders, including respiratory diseases. The preference for biologics stems from their high target specificity, strong binding affinity, and favorable safety profiles. Most approved biologics are peptides or proteins, which are unsuitable for oral administration due to negligible bioavailability, resulting from their large molecular size, polarity, and susceptibility to enzymatic degradation in the gastrointestinal tract. Consequently, the majority of biologics are administered parenterally, delivering the drug systemically to reach target sites. However, achieving therapeutic concentrations of locally acting respiratory drugs in the lungs via systemic delivery often requires high doses, which increases the risk of adverse effects. For respiratory disorders, nasal and pulmonary drug deliveries are the preferred noninvasive routes. These routes bypass gastrointestinal and first-pass metabolism and deliver therapeutic agents directly to their local site of action. This approach enables a faster onset of action, reduces the required dose by orders of magnitude, and significantly lowers the risk of systemic adverse effects. These advantages have driven the successful development of inhaled formulations for certain rescue and maintenance medications that were originally administered orally or parenterally. Despite this, treatment options for respiratory diseases remain largely limited to small molecules, with only a single inhaled biologic approved in 1993, even though several parenterally administered biologics have since been approved for pulmonary disorders. The scarcity of inhaled biologics is primarily due to the inherent complexity of these drug substances, which impacts all stages of product development, including manufacturing, characterization, purification, stability, formulation design, delivery, and preclinical and clinical evaluations of safety and efficacy. Additionally, sponsors’ interest in developing inhaled biologics may be tempered by the lack of regulatory guidance addressing the multidisciplinary and intricate nature of their development. This article, together with the accompanying review, addresses both regulatory considerations and scientific challenges in the development of inhaled biologics. To the authors’ knowledge, these works represent seminal efforts to examine available regulatory guidance and the applicable literature across various phases of product development beyond safety and efficacy evaluations. We examined the formal regulatory expectations and summarized the requirements as they apply to inhaled products and inhaled biologic protein therapeutics. In parallel, we explored scientifically relevant considerations in the development of inhalation-specific protein therapeutics for which regulatory guidance remains limited, evolving, or absent. While they should not be considered definitive, it is hoped that these contributions will stimulate scientific and regulatory interest, ultimately promoting the identification and resolution of gaps to advance the development of locally acting biologics and address unmet patient needs.