Loxapine is a first generation antipsychotic, belonging to the dibenzoxazepine class. Recently, loxapine has been reformulated at a lower dose, producing an inhaled powder that can be directly administered to the lungs to treat the agitation associated with psychiatric disorders, such as schizophrenia and bipolar disorder. Thus, the aim of this narrative and clinical mini-review was to evaluate the efficacy and tolerability of inhaled loxapine in the treatment of acute agitation in patients with psychiatric disorders. The efficacy of inhaled loxapine has been evaluated in one Phase II trial on patients with schizophrenia, and in two Phase III trials in patients with schizophrenia and bipolar disorder. Moreover, there are two published case series on patients with borderline personality disorder and dual diagnosis patients. Inhaled loxapine has proven to be effective and generally well tolerated when administered to agitated patients with schizophrenia and bipolar disorder. Two case series have suggested that inhaled loxapine may also be useful to treat agitation in patients with borderline personality disorder and with dual diagnosis, but further studies are needed to clarify this point. However, the administration of inhaled loxapine requires at least some kind of patient collaboration, and is not recommended in the treatment of severe agitation in totally uncooperative patients. Moreover, the drug-related risk of bronchospasm must always be kept in mind when planning to use inhaled loxapine, leading to a careful patient assessment prior to, and after, administration. Also, the higher costs of inhaled loxapine, when compared to oral and intramuscular medications, should be taken into account when selecting it for the treatment of agitation.