Inhalation of dry powder synthetic lung surfactant may assist spontaneous breathing by providing noninvasive surfactant therapy for premature infants supported with nasal continuous positive airway pressure. Surfactant was formulated using spray-drying with different phospholipid compositions (70 or 80 total weight% and 7:3 or 4:1 DPPC:POPG ratios), a surfactant protein B peptide analog (KL4, Super Mini-B, or B-YL), and Lactose or Trehalose as excipient. KL4 surfactant underperformed on initial adsorption and surface activity at captive bubble surfactometry. Spray-drying had no effect on the chemical composition of Super Mini-B and B-YL peptides and surfactant with these peptides had excellent surface activity with particle sizes and fine particle fractions that were well within the margins for respiratory particles and similar solid-state properties. Prolonged exposure of the dry powder surfactants with lactose as excipient to 40 °C and 75% humidity negatively affected hysteresis during dynamic cycling in the captive bubble surfactometer. Dry powder synthetic lung surfactants with 70% phospholipids (DPPC and POPG at a 7:3 ratio), 25% trehalose and 3% of SMB or B-YL showed excellent surface activity and good short-term stability, thereby qualifying them for potential clinical use in premature infants.