Theophylline (TP) is a very well established orally or intravenously delivered antiasthma drug with many beneficial effects. This study aims to improve asthma treatment by creating a dry powder inhalable (DPI) formulation of TP to be delivered directly to the lung, avoiding the side effects associated with conventional oral delivery. The DPI TP formulation was investigated for its physico-chemical characteristics using scanning electron microscopy, laser diffraction, thermal analysis and dynamic vapour sorption. Furthermore, aerosol performance was assessed using the Multi Stage Liquid Impinger (MSLI). In addition, a Calu-3 cell transport assay was conducted in vitro using a modified ACI to study the impact of the DPI formulation on lung epithelial cells. Results showed DPI TP to be physico-chemically stable and of an aerodynamic size suitable for lung delivery. The aerosolisation performance analysis showed the TP DPI formulation to have a fine particle fraction of 29.70 ± 2.59% (P < 0.05) for the TP formulation containing 1.0% (w/w) sodium stearate, the most efficient for aerosolisation. Regarding the deposition of TP DPI on Calu-3 cells using the modified ACI, results demonstrated that 56.14 ± 7.62% of the total TP deposited (13.07 ± 1.69 µg) was transported across the Calu-3 monolayer over 180 min following deposition, while 37.05 ± 12.62% of the deposited TP was retained in the cells. This could be due to the presence of sodium stearate in the current formulation that increased its lipophilicity. A DPI formulation of TP was developed that was shown to be suitable for inhalation.