Idiopathic pulmonary fibrosis (IPF) is a chronic inflammatory and fibrotic response-driven lung disease that is difficult to cure because it manifests excessive profibrotic cytokines (e.g., TGF-β), activated myofibroblasts, and accumulated extracellular matrix (ECM). In an attempt to develop an inhalation formulation with enhanced antifibrotic efficacy, we sought to fabricate unique aerosolizable inhaled microgels (μGel) that contain nintedanib-poly(lactic-co-glycolic acid) (PLGA) nanoparticles (NPs; n-PN) and pirfenidone-liposomes (p-LP). The aero-μGel was ∼12 μm, resisted phagocytosis by alveolar macrophages in vitro and in vivo, and protected inner-entrapped n-PN and p-LP. The n-PN/p-LP@aero-μGel caused enhanced/extended antifibrotic efficacy in a bleomycin-induced pulmonary fibrosis mouse presumably due to prolonged lung residence. Consequently, the results obtained by intratracheal aerosol insufflation of our n-PN/p-LP@aero-μGel twice a week were much better than those by as many as seven doses of single or mixed applications of n-PN or p-LP. The antifibrotic/pharmacokinetic results for the n-PN/p-LP@aero-μGel included reduced fibrosis progression, restored lung physiological functions, deactivated myofibroblasts, inhibited TGF-β progression, and suppressed ECM component production (collagen I and α-SMA) along with prolonged lung retention time. We believe that our n-PN/p-LP@aero-μGel increased the local availability of both nintedanib and pirfenidone due to evasion of alveolar macrophage phagocytosis and prolonged lung retention with reduced systemic distribution. Through this approach, our inhalation formulation subsequently attenuated fibrosis progression and improved lung function. Importantly, these results hold profound implications in the therapeutic potential of our n-PN/p-LP@aero-μGel to serve as a clinically promising platform, providing significant advancements for improved treatment of many respiratory diseases including IFP.