Biodegradable polymers are drawing a great deal of attention in the field of nanotechnology. Albumin, abundantly present in human body, is a biocompatible and biodegradable polymer used in drug delivery systems. It is relatively an inexpensive polymer with several advantages like non-toxicity, high drug loading capacity, binding efficiency with many drugs which qualifies it as an ideal nanocarrier. The present review discusses potential of albumin nanocarriers for pulmonary application. It also discusses feasibility of employing albumin from different sources. Formulation aspects of albumin nanosystems, methods of preparation and dosage form designing are also covered. An array of excipient options suitable to be used in albumin nanocarrier system is presented. Toxicity aspects and applications of albumin nanoparticles with focus on pulmonary application are highlighted. Application of nanoparticulate structures based on albumin in delivery of drugs from category of anticancer agents, vaccines, hormones, anti-asthamatics and anti-inflammatory agents to lungs is covered. This review offers a framework for pharmaceutical scientists in designing of albumin nanoparticles for various pulmonary and systemic applications via inhalation delivery.