Cystic fibrosis (CF) is a genetic disorder affecting nearly 105,000 patients worldwide and is characterized by poor respiratory function due to accumulation of thick mucus in the lungs, which not just acts as a physical barrier, but also provides a breeding ground for bacterial infections. These infections can be controlled with the help of antibiotics which can be delivered directly into the lungs for amplifying the local anti-bacterial effect. More than 50 % of CF patients are associated with Pseudomonas aeruginosa infection in their lungs which requires antibiotics such as Aztreonam (AZT). In this study, we prepared inhalable AZT-loaded lipid nanoparticles using Hot-melt extrusion (HME) coupled with probe sonication to target Pseudomonas aeruginosa infection in the lungs. The optimized nanoparticles were tested for physicochemical properties, stability profile, in-vitro aerosolization, and antimicrobial activity against Pseudomonas aeruginosa. The optimized nanoparticles with a PEI concentration of 0.1 % demonstrated a uniform particle size of <50 nm, a spherical shape observed under a transmission electron microscope, and >70 % drug entrapment. Incorporating cationic polymer, PEI, resulted in sustained drug release from the lipid nanoparticles. The in-vitro aerosolization studies exhibited a mass median aerodynamic diameter (MMAD) of <4.3 μm, suggesting deposition of the nanoparticles in the respirable airway. The antimicrobial activity against Pseudomonas aeruginosa showed the minimum inhibitory concentration of the formulation is 2-fold lower than plain AZT. Stability profile showed the formulations are stable after exposure to accelerated conditions. In conclusion, hot-melt extrusion in combination with probe sonication can be used as a potential method for the continuous production of AZT-loaded lipid nanoparticles with enhanced anti-bacterial activity.