Inhalation delivery of aerosolized antibacterials is preferred over conventional methods of delivery for targeting lung infection. The present study is concerned with the development and characterization of a novel, spray dried, aerosolized, chitosan polyelectrolyte complex (PEC) based microparticles containing antibacterials for the treatment of lung infections. Chitosan polyelectrolyte complex microparticles were formulated by spray drying process. Prepared spray dried chitosan PEC microparticles were studied for surface morphology, drug encapsulation efficiency, moisture content, Carr's index, solid state interaction by XRD, aerosolization behaviour and in-vitro drug release. In-vitro cytotoxicity studies of microparticles were carried out on H1299 alveolar cell lines. Antibacterial efficacy of microparticles was assessed on the basis of determination of pharmacokinetic parameters in bronchial alveolar lavage (BAL) of rats using PK/PD analysis. The PEC microparticles were mostly spherical and exhibited high drug encapsulation efficiency. Release profiles showed an initial burst phase followed by a secondary sustained release phase. Good aerosolization behaviour as dry powder inhaler was demonstrated by microparticles with high values of recovered dose, emitted dose, and fine particle fraction. No overt cytotoxicity of microparticles was detected against H1299 alveolar cell line. More than 8 to 9 folds higher Cmax values were obtained in BAL fluid with microparticles as compared to intravenously administered antibacterial solution. The findings of the study suggest that chitosan polyelectrolyte complex based microparticles as dry powder inhaler can be an efficient antibacterial delivery system for sustained and effective management of lung infection.