A strategy to overcome the side effect liabilities of oral PDE4 inhibitors has been to deliver the drugs by inhalation. In this report, we identify 1-[[5-(1(S)-aminoethly)-2-[8-methoxy-2-(triflurormethyl)-5-quinolinyl]-4-oxazolyl] carbonyl]-4(R)-[(cyclopropylcarbonyl)amino]-L-proline, ethyl ester xinafoate salt, (COMPOUND 1) as a potent and selective inhibitor of PDE4 with biological and pharmacokinetic properties suitable for delivery by the inhaled route. COMPOUND 1 potently inhibits human PDE4 (IC(50)=70pM) with little or no activity against other PDEs. It is highly potent against PDE4B and PDE4D which are important isoforms of PDE4 controlling inflammation and airway functions. In an allergen-challenged Brown Norway rat model of asthma, COMPOUND 1 inhibited the late phase influx of inflammatory cells and reductions in lung function following its administration by the intratracheal or nose-only routes of administration. Important differences were seen between intratracheal COMPOUND 1 and our previously published results with the oral PDE4 inhibitor roflumilast (Celly et al., 2005), as COMPOUND 1 rapidly (within 1h) reversed the decline in lung function when it was given therapeutically to rats already challenged with antigen. COMPOUND 1 was weakly active by the oral route which is a finding consistent with results showing this compound has poor oral bioavailability in animals. Positive interactions between COMPOUND 1 and albuterol, and COMPOUND 1 and mometasone furoate were seen on the improvement in lung functions in allergen-challenged rats. These results identify COMPOUND 1 as a potent and selective inhibitor of PDE4 with properties suitable for delivery by inhalation.