Inhaled immunosuppression with tacrolimus (TAC) is a novel strategy after lung transplantation. Here we investigate the feasibility of tacrolimus delivery via aerosol, assess its immunosuppressive efficacy, reveal possible mechanisms of action, and evaluate its airway toxicity. Rats received 4 mg/kg TAC via oral or inhaled (AER) administration. Pharmacokinetic properties were compared, and in vivo airway toxicity was assessed. Full-thickness human airway epithelium (AE) was grown in vitro at an air-liquid interface. Equal TAC doses (10-1,000 ng) were either added to the bottom chamber (MED) or aerosolized for gas-phase exposure (AER). Airway epithelium TAC absorption, cell toxicity, and interactions of TAC with NFκB activation were studied. Single-photon emission computed tomography demonstrated a linear tracer accumulation within the lungs during TAC inhalation. The AER TAC generated higher lung-tissue concentrations, but blood concentrations that were 11 times lower. Airway histology and gene expression did not reveal drug toxicity after 3 weeks of treatment. In vitro AE exposed to TAC at 10-1,000 ng, orally or AER, maintained its pseudostratified morphology, did not show cell toxicity, and maintained its epithelial integrity, with tight junction formation. The TAC AER-treated AE absorbed the drug from the apical surface and generated lower-chamber TAC concentrations sufficient to suppress activated lymphocytes. Tacrolimus AER was superior to TAC MED at preventing AE IFN-γ, IL-10, IL-13, monocyte chemoattractant protein-1 chemokine (C-C motif) ligand 5 (RANTES) and TNF-α up-regulation. Tacrolimus inhibited airway epithelial cell NFκB activation. In conclusion, TAC can be delivered easily and effectively into the lungs without causing airway toxicity, decreases inflammatory AE cytokine production, and inhibits NFκB activation.