BACKGROUND: Aerosolized therapeutics hold great potential for effective treatment of various diseases including lung cancer. In this context, there is an urgent need to develop novel nanocarriers suitable for drug delivery by nebulization. To address this need, we synthesized and characterized a biocompatible drug delivery vehicle following surface coating of Fe3O4 magnetic nanoparticles (MNPs) with a polymer poly(lactic-co-glycolic acid) (PLGA). The polymeric shell of these engineered nanoparticles was loaded with a potential anti-cancer drug quercetin and their suitability for targeting lung cancer cells via nebulization was evaluated. RESULTS: Average particle size of the developed MNPs and PLGA-MNPs as measured by electron microscopy was 9.6 and 53.2 nm, whereas their hydrodynamic swelling as determined using dynamic light scattering was 54.3 nm and 293.4 nm respectively. Utilizing a series of standardized biological tests incorporating a cell-based automated image acquisition and analysis procedure in combination with real-time impedance sensing, we confirmed that the developed MNP-based nanocarrier system was biocompatible, as no cytotoxicity was observed when up to 100 μg/ml PLGA-MNP was applied to the cultured human lung epithelial cells. Moreover, the PLGA-MNP preparation was well-tolerated in vivo in mice when applied intranasally as measured by glutathione and IL-6 secretion assays after 1, 4, or 7 days post-treatment. To imitate aerosol formation for drug delivery to the lungs, we applied quercitin loaded PLGA-MNPs to the human lung carcinoma cell line A549 following a single round of nebulization. The drug-loaded PLGA-MNPs significantly reduced the number of viable A549 cells, which was comparable when applied either by nebulization or by direct pipetting. CONCLUSION: We have developed a magnetic core-shell nanoparticle-based nanocarrier system and evaluated the feasibility of its drug delivery capability via aerosol administration. This study has implications for targeted delivery of therapeutics and poorly soluble medicinal compounds via inhalation route.