Nanoparticle agglomeration in solution represents a new strategy for formulating dry powder aerosols as an alternative to conventional spray drying, spray freeze drying, lyophilization, etc. Dry powders were formed by obtaining a suspension of drug nanoparticles or nanoencapsulated drug and destabilizing the colloid to form agglomerates of a desirable size in solution. Nanoparticle agglomerates were then filtered or concentrated and dried to form a free-flowing powder. A variety of API and excipients such as nifedipine, ciprofloxacin, insulin, stearic acid, poly(dl-lactic-co-glycolic acid), etc., were formulated as low density “nanocluster” powders (~0.1 g/cm3) exhibiting appropriate aerodynamic diameter (~1-2 µm) for pulmonary administration. Excellent control over agglomerate size and density was achieved as well by controlling shear, particle concentration, particle zeta potential, and the concentration of destabilizer (e.g. polymer or salt). Finally, nanocluster particles possessed desirable, irregular surface microstructure for facilitating powder dispersion, decreasing agglomeration, and decreasing adhesion to surfaces. Nanoparticle agglomerates or “clusters” represent a unique and simple method for utilizing nanoparticles in a dry powder formulation.