Dry powder inhalers (DPIs) can be used with a wide range of drugs such as small molecules and biologics and offer several advantages for inhaled therapy. Early DPI products were intended to treat asthma and lung chronic inflammatory disease by administering low-dose, high-potency drugs blended with lactose carrier particles. The use of lactose blends is still the most common approach to aid powder flowability and dose metering in DPI products. However, this conventional approach may not meet the high demand for formulation physical stability, aerosolisation performance, and bioavailability. To overcome these issues, innovative techniques coupled with modification of the traditional methods have been explored to engineer particles for enhanced drug delivery. Different particle engineering techniques have been utilised depending on the types of the active pharmaceutical ingredient (e.g., small molecules, peptides, proteins, cells) and the inhaled dose. This review discusses the challenges of formulating DPI formulations of low-dose and high-dose small molecule drugs, and biologics, followed by recent and emerging particle engineering strategies utilised in developing the right inhalable powder formulations for enhanced drug delivery.