Aerosolized medicine is one of the fastest growing areas in the pharmaceutical industry. Dry powder aerosols of pharmaceutical compounds are particularly attractive for the prevention and treatment of respiratory diseases but are also emerging as a treatment option for systemic diseases. Engineering particles in dry powder formulations can overcome many of the limitations of traditional inhaled pharmaceuticals. Here, a wet milling process for producing agglomerated budesonide nanoparticles (i.e., "NanoClusters") was explored. Parameters such as milling time and drug concentration were investigated, and the aerosol performance of dried budesonide NanoClusters was characterized. The wet milling process was able to produce aerosol particles composed entirely of budesonide. High emitted fraction and a large fine particle fraction suggested that the NanoCluster budesonide formulation would offer highly efficient delivery of drug throughout the lung. © 2012 Wiley Periodicals, Inc. and the American Pharmacists Association J Pharm Sci.