Aerosolized cyclosporine was the first calcineurin inhibitor to be developed for inhaled administration. Its use as a topical immunosuppressant after lung transplantation is reviewed. Animal studies in transplant and non-transplant models are considered, as is nebulized delivery of the drug, including the results of scintigraphy and pharmacokinetic studies. Open label clinical studies of the drug for the treatment of chronic and acute lung transplant rejection are detailed. Placebo controlled trials for rejection prophylaxis are described and future directions for the drug are considered. Aerosol cyclosporine provides an excellent example of how inhaled aerosol delivery can provide therapeutic concentrations of drug in the lungs while minimizing the side effects associated with high systemic concentrations. In the case of lung transplantation, the drug is delivered directly to the airways, the location of the pathology resulting in most mortality in this population (chronic allograft rejection), maximizing the efficacy of this dose-dependent immunosuppressant.