Albumin nanoparticles are already in use in the clinic for injected delivery of the anti-cancer drug paclitaxel (Abraxane®), but as yet little research has been undertaken into their use for pulmonary drug delivery. Through SPECT/CT imaging studies, we have demonstrated their potential as a controlled release system in the lung due to their modified clearance profile compared to non-particulate albumin. Following on, the aim of this study was to investigate whether BSA nanoparticles were biodegraded by proteases at concentrations found in lung epithelial lining fluid. This is crucial for effective drug release, and also important for the clearance of nanoparticles from the lung to avoid accumulation on repeat dosing. We have investigated protease digestion of bovine serum albumin nanoparticles at a physiological protease concentration using a model enzyme (trypsin) in in vitro simulants of lung lining fluid using UV/Vis absorption, dynamic light scattering (DLS) and transmission electron microscopy (TEM). In a simple trypsin system, after 4 h at least 60% of BSA nanoparticles were broken down, with over 77% being digested after 48 h. In a more complex protein-supplemented medium, over 79% of particles were fully digested at 48 h. DLS and TEM were used to investigate particle sizes and distribution over 48 h. This particle digestion over a 48 h period suggests that albumin nanoparticles have potential for use as a controlled release system with a biodegradation rate that alleviates concerns about accumulation and related toxicity of nanoparticles in the lung.