In vivo pharmacodynamic (PD) studies have a number of shortcomings: they are expensive, animal models are not always predictive of effects in humans and clinical studies are not always capable of demonstrating similarities or differences between inhaled products. Therefore, there is a need to develop effective in vitro assays for use as an alternative to in vivo evaluations of the drug action. Using salbutamol sulphate as an archetypal bronchodilator compound, the aim of this study was to develop an in vitro bioassay for drug action following delivery by an orally inhaled product. A cyclic adenosine monophosphate (cAMP) assay was established as a surrogate endpoint for muscle relaxation. When developing the cAMP bioassay, healthy airway smooth muscle (ASM) showed a dose response curve to forskolin, isoprenaline and salbutamol sulphate. The response to salbutamol was most reproducible when drug was incubated with ASM for 15 min. In a co-culture system, salbutamol sulphate was applied to the mucosal surface of an epithelial cell layer (Calu-3 cells) and drug activity was assayed in sub-mucosal ASM after the drug had penetrated the epithelial cell layer. A dose-response was demonstrated in this model which indicated the potential for it to be interfaced with an aerosol deposition technique, e.g. the Twin Stage Impinger (TSI), to evaluate and compare the delivery of β2 agonists from inhaled products.