Chronic airway inflammation is a hallmark of chronic obstructive airway diseases, including asthma, COPD (chronic obstructive pulmonary disease), and CF (cystic fibrosis). It is also a major challenge in delivery and therapeutic efficacy of nano-based delivery systems in these chronic airway conditions as nanoparticle (NP) need to bypass airways defense mechanisms as we recently discussed. NPs which are capable of overcoming airways defense mechanisms should allow targeted drug delivery to disease cells. Over the last decade there has been increasing interest in development of targeted NPs for cancer but relatively little effort on designing novel systems for treating chronic inflammatory and obstructive airway conditions. Here we describe methods for preparing drug loaded multifunctional nanoparticles for targeted delivery to specific cell types in airways. The formulations and methods for selective drug delivery, discussed here are currently under preclinical development in our laboratory for treating chronic airway conditions such as COPD, CF, and asthma.