Gram-negative pneumonia in patients who are intubated and mechanically ventilated is associated with increased morbidity and mortality as well as higher healthcare costs compared with those who do not have the disease. Intravenous antibiotics are currently the standard of care for pneumonia; however, increasing rates of multidrug resistance and limited penetration of some classes of antimicrobials into the lungs reduce the effectiveness of this treatment option, and current clinical cure rates are variable, while recurrence rates remain high. Inhaled antibiotics may have the potential to improve outcomes in this patient population, but their use is currently restricted by a lack of specifically formulated solutions for inhalation and a limited number of devices designed for the nebulization of antibiotics. In this article, we review the challenges clinicians face in the treatment of pneumonia and discuss the characteristics that would constitute an ideal inhaled drug/device combination. We also review inhaled antibiotic options currently in development for the treatment of pneumonia in patients who are intubated and mechanically ventilated.