This study examines the potential of 1,2-dipalmitoylphosphatidylcholine (DPPC), a major component of lung surfactant, to reduce the phagocytosis of microspheres by altering the cellular interactions occurring in the alveoli. These microspheres could be designed to act as a controlled delivery system for small molecules, peptides or proteins for pulmonary administration. Microspheres were prepared using poly (lactic-co-glycolic acid) (PLGA, 50/50 and encapsulated peroxidase as a model protein. DPPC was included in some formulations. The interaction of PLGA and DPPC-PLGA microspheres with phagocytic cells was evaluated using lung macrophages in culture. X-ray Photoelectron Spectra (XPS) results indicate that the inclusion of DPPC in the microspheres alters the microsphere surface chemistry, with the DPPC covering a large portion of the microsphere surface. The dominance of DPPC on the microsphere surface is highly beneficial in moderating the interaction occurring between the microspheres and phagocytic cells in the lung. Fluorescent confocal microscopy indicates that only 25% of cells internalized DPPC-coated particles, whereas 70% of those cells exposed to particles without the DPPC coating internalized particles after one hour of incubation.