Particle engineering broadly refers to the controlled production of drug particles optimized for size, morphology, and structure. It encompasses both destructive (top-down) and constructive (bottom-up) particle formation processes, of which the most used for commercial dry powder inhaler products are milling and spray drying. In both cases, undesirable physicochemical changes may occur because of thermal and mechanical stresses and through interactions with solvents, and can be further potentiated through storage and interaction with atmospheric water. The occurrence and extent of these phenomena are dependent upon the process parameters and the starting material, which necessitates a thorough understanding of these factors to create a stable product with the necessary characteristics for lung deposition. This review covers commonly arising issues in particle engineering and mechanisms of prevention. Topics to be discussed relating to physical changes include (1) the unintended generation of crystalline disorder and amorphous regions in particles; (2) polymorphic transformations; (3) unintended crystallization when amorphization is desired; and (3) triboelectric charging. Topics to be discussed relating to chemical changes include (1) thermal and mechanically activated chemical reactions; and (2) crystalline disorder and chemical reactivity.