Local immunosuppression by inhalation is a novel strategy after lung transplantation. Here we investigate the feasibility of R507 delivery via aerosol, assess its immunosuppressive efficacy, and evaluate its airway toxicity on human airway epithelial cells.Orthotopic rat tracheal transplantations were performed in the Lew-to-BN model and recipients were left untreated or treated with R507 (60mg/kg BID) orally (PO) or via aerosol (AER) for 60 days. Drug distribution after inhalation, graft histopathology, host immune responsiveness, and side effects were closely monitored over time. Full-thickness human airway epithelium (AE) was grown in vitro at air-liquid interface to study cell biology and equal R507 doses were either added to the bottom chamber (MED) or aerosolized for gas phase exposure. Cell toxicity and the epithelial integrity were studied.SPECT imaging demonstrated a linear tracer accumulation within the transplanted trachea during R507 inhalation. After 60 days, obliterative airway disease (OAD) was similarly inhibited with R507 PO (14.1±4.8%) and AER (21.7±9.8%) vs. untreated animals (37.1±7.2%, p<0.05). Epithelial cell viability was preserved even after local administration of R507 AER as demonstrated by PAS histopathology and confocal immunofluorescence for cytokeratin. In vitro AE exposed to R507 PO or AER maintained its pseudostratified morphology as assessed by confocal immunofluorescence for cytokeratin and Ki67, did not show cell toxicity in the LDH release assay, and maintained its epithelial integrity with tight junction formation and stable transepithelial resistance.The novel JAK1/3 inhibitor R507 potently inhibits the development of OAD without causing airway toxicity. Thus, R507 has the potential to markedly reduce morbidity after lung transplantation.