Chitosan (CS), due to its inherent mucoadhesive property and biofilm penetration ability, can be considered as very potent vehicle for local drug delivery to the lungs. This study reports on the preparation and in vitro antibacterial activity and cytotoxicity determination of ciprofloxacin loaded chitosan (Cipro-CS) microparticles with size in the range of 0.1-1 mu m, which may provide advantages of lower nanotoxicity and lower local clearance. Cipro-CS microparticles were prepared by ionic gelation method and their size, zeta potential and drug release pattern determined. The antibacterial activities of CS and Cipro-CS microparticles against pneumonia causing agents, namely Escherichia coil, Pseudomonas aeruginosa and Staphylococcus aureus, were evaluated by determination of minimum inhibitory concentration (MIC) and minimum bactericidal concentration (MBC). The biocompatibility of the microparticles was tested in the human lung epithelial cell (BEAS-2B) culture, and microparticle association with the bacteria and epithelial cells was evaluated by transmission electron microscopy. Only the Cipro-CS microparticles, but not the CS microparticles, inhibited bacterial growth at concentrations not significantly cytotoxic to BEAS-2B cells. The Cipro-CS microparticles were able to damage the cell wall and membrane of the bacteria, and the ones <= 200 nm in size were internalized by both the BEAS-2B cells and the microorganisms.