Pharmacodynamics (PD) is discussed in relation to inhalation exposure to inhaled pharmaceutical and toxic agents. Clearly PD is closely related to pharmacokinetics, and this relation is illustrated with reference to inhaled insulin. PD can be related to pharmacologic responses, and some examples are cited. However, PD can also be thought of as the improvement or deterioration in lung disease state. Some of the major PD endpoints, including histopathology, pulmonary function, and bronchoalveolar lavage are reviewed. Brief reference is also given to other specialty biomarkers of PD response.