Biologic therapeutics such as protein/polypeptide drugs are conventionally administered systemically via intravenous injection for the treatment of diseases including lung diseases, although this approach leads to low target site accumulation and the potential risk for systemic side effects. In comparison, topical delivery of protein drugs to the lung via inhalation is deemed to be a more effective approach for lung diseases, as proteins would directly reach the target in the lung while exhibiting poor diffusion into the systemic circulation, leading to higher lung drug retention and efficacy while minimising toxicity to other organs. This review examines the important considerations and challenges in designing an inhaled protein therapeutics for local lung delivery: the choice of inhalation device, structural changes affecting drug deposition in diseased lungs, clearance mechanisms affecting an inhaled protein drug’s lung accumulation, protein stability, and immunogenicity. Possible approaches to overcoming these issues will also be discussed.