Inhalable glycol chitosan-coated poly(lactic-co-glycolic acid) (PLGA) nanoparticles containing palmitic acid-modified exendin-4 (Pal-Ex4) (chitosan Pal-Ex4 PLGA NPs) were prepared and characterized. The surface morphology, particle size, and zeta potential of chitosan Pal-Ex4 PLGA NPs were investigated, and the adsorption and cytotoxicity of chitosan Pal-Ex4 PLGA NPs were evaluated in human lung epithelial cells (A549). Finally, the lung deposition characteristics and hypoglycemia caused by chitosan Pal-Ex4 PLGA NPs were evaluated after pulmonary administration in imprinting control region (ICR) and type 2 diabetic db/db mice. Results showed that chitosan Pal-Ex4 PLGA NPs were spherical, compact and had a diameter of ∼700 nm and a positive surface charge of +28.5 mV. Chitosan-coated PLGA NPs were adsorbed onto A549 cells much more so than non-coated PLGA NPs. Pal-Ex4 release from chitosan-coated PLGA NPs was delayed by as much as 1.5 days as compared with chitosan-coated Ex4 PLGA NPs. In addition, chitosan-coated PLGA NPs remained in the lungs for ∼72 hours after pulmonary administration, whereas most non-coated PLGA NPs were lost at 8 hours after administration. Furthermore, the hypoglycemic efficacy of inhaled chitosan Pal-Ex4 PLGA NPs was 3.1-fold greater than that of chitosan Ex4 PLGA NPs in db/db mice. The authors believe chitosan Pal-Ex4 PLGA NPs have considerable potential as a long-acting inhalation delivery system for the treatment of type 2 diabetes.