Idiopathic pulmonary fibrosis (IPF) is a fatal and progressive interstitial lung disease with a high mortality rate due to limited prognosis. According to the National Institutes of Health (NIH), approximately 100,000 people in the United States suffer from IPF, and around 50% likelihood of dying within 2–3 years. Currently, nintedanib (Nint) is one of the only 2 FDA-approved drugs for the treatment of IPF, with anti-fibrotic and anti-inflammatory activities. However, Nint oral capsules have some undesirable limitations such as low bioavailability and high dose requirement for sufficient therapeutic efficacy, leading to various side effects associated with oral delivery. To address these shortcomings and enhance the therapeutic potential, Nint was loaded into PLGA nanoparticles (Nint NPs) for localized pulmonary delivery. In-vitro cell culture studies indicated that nano-sized particles (179 ± 3 nm) of Nint NPs enhanced cellular uptake in airway epithelial cells and normal human lung fibroblasts, while readily avoiding macrophage phagocytosis. Transforming growth factor-beta (TGF-β) (10 ng/mL) was selected to establish IPF in cells, which resulted in proliferation and rapid wound healing, whereas Nint NPs showed superior ability in inhibiting these pathological phenomena compared to free Nint. Upon further evaluation of pathological mechanisms of IPF, Nint NPs remarkably attenuated epithelial-to-mesenchymal transition (EMT) by elevating epithelial marker E-cadherin level and reducing extracellular matrix (ECM) deposition by evidence of reduced collagen production and fibroblast-to-myofibroblast differentiation marker, α-SMA. Nint NPs also decreased expression of inflammatory cytokine IL-17A and indicated autophagy as a separate anti-fibrotic mechanism. Finally, Nint NPs proved their superior efficacy in a novel IPF cell model using diseased lung ECM substrates. Hence, inhalation therapy of Nint NPs is a promising alternative tool for oral capsules in IPF therapy.