The antifungal activity of amphotericin B (AmB) incorporated in three cholesteryl carbonate esters (CCEs), sodium cholesteryl carbonate, cholesteryl palmityl carbonate, and dicholesteryl carbonate, was examined to assess their potential for use in a dry powder aerosol. Formulations containing dissolved AmB were stable for 6 months. The particle size varied inversely with liquid crystalline content with observed mass median aerodynamic diameters ranging from 4 to 8 μm. This was consistent with the visual appearance of the liquid crystals as being low density and free flowing at room temperature. When dispersed in water, the presence of the CCE reduced the rate and extent of AmB release, consistent with the estimated liquid crystal/water partition coefficient. Nevertheless, the rate of AmB release was always sufficient to kill the fungus as established with bioactivity studies. AmB formulated with CCE as a dry powder appears to be promising for use in treating lung fungal infections. © 2010 Wiley‐Liss, Inc. and the American Pharmacists Association J Pharm Sci 100:1727–1735, 2011