The studies were undertaken to evaluate feasibility of pulmonary delivery of liposomaly encapsulated tacrolimus dry powder inhaler for prolonged drug retention in lungs as rescue therapy to prevent refractory rejection of lungs after transplantation. Tacrolimus encapsulated liposomes were prepared by thin film evaporation technique and liposomal dispersion was passed through high pressure homogenizer. Tacrolimus nano-liposomes (NLs) were separated by centrifugation and characterized. NLs were dispersed in phosphate buffer saline (PBS) pH 7.4 containing different additives like lactose, sucrose, and trehalose, and L-leucine as antiadherent. The dispersion was spray dried and spray dried powders were characterized. In vitro and in vivo pulmonary deposition was performed using Andersen Cascade Impactor and intratracheal instillation in rats respectively. NLs were found to have average size of 140 nm, 96% +/- 1.5% drug entrapment, and zeta potential of 1.107 mV. Trehalose based formulation was found to have low density, good flowability, particle size of 9.46 +/- 0.8 microm, maximum fine particle fraction (FPF) of 71.1 +/- 2.5%, mean mass aerodynamic diameter (MMAD) 2.2 +/- 0.1 microm, and geometric standard deviation (GSD) 1.7 +/- 0.2. Developed formulations were found to have in vitro prolonged drug release up to 18 hours, following Higuchi's Controlled Release model. In vivo studies revealed maximal residence of tacrolimus within lungs of 24 hours, suggesting slow clearance from the lungs. The investigation provides a practical approach for direct delivery of tacrolimus encapsulated in NLs for controlled and prolonged retention at the site of action. It may play a promising role as rescue therapy in reducing the risk of acute rejection and chronic rejection.