Until the late 1990s, aerosol therapy consisted of beta2-adrenergic agonists, anti-cholinergics, steroidal and non-steroidal agents, mucolytics and antibiotics that were used to treat patients with asthma, COPD and cystic fibrosis. Since then, inhalation therapy has matured to include drugs that: (1) are designed to treat diseases outside the lung and whose target is the systemic circulation (systemic drug delivery); (2) deliver nucleic acids that lead to permanent expression of a gene construct, or protein coding sequence, in a population of cells (gene therapy); and (3) provide needle-free immunization against disease (aerosolized vaccination). During the evolution of these advanced applications, it was also necessary to develop new devices that provided increased dosing efficiency and less loss during delivery. This review will present an update on the success of each of these new applications and their devices. The early promise of aerosolized systemic drug delivery and its outlook for future success will be highlighted. In addition, the challenges to aerosolized gene therapy and the need for appropriate gene vectors will be discussed. Finally, progress in the development of aerosolized vaccination will be presented. The continued expansion of the role of aerosol therapy in the future will depend on: (1) improving the bioavailability of systemically delivered drugs; (2) developing gene therapy vectors that can efficiently penetrate the mucus barrier and cell membrane, navigate the cell cytoplasm and efficiently transfer DNA material to the cell nucleus; (3) improving delivery of gene vectors and vaccines to infants; and (4) developing formulations that are safe for acute and chronic administrations.