To establish a homing signal in the lung to recruit circulating stem cells for tissue repair, we formulated a nanoparticle, SDF-1α NP, by complexing SDF-1α with dextran sulfate and chitosan. The data show that SDF-1α was barely released from the nanoparticles over an extended period of time in vitro (3% in 7 days at 37 °C); however, incorporated SDF-1α exhibited full chemotactic activity and receptor activation compared to its free form. The nanoparticles were not endocytosed after incubation with Jurkat cells. When aerosolized into the lungs of rats, SDF-1α NP displayed a greater retention time compared to free SDF-1α (64 vs 2% remaining at 16 h). In a rat model of monocrotaline-induced lung injury, SDF-1α NP, but not free form SDF-1α, was found to reduce pulmonary hypertension. These data suggest that the nanoparticle formulation protected SDF-1α from rapid clearance in the lung and sustained its biological function in vivo.