Gemcitabine hydrochloride (GCH) is drug of choice for treatment of non-small cell lung cancer. This project aims to formulate GCH-loaded spherulites for lung targeting using soyabean phosphatidylcholine, cholesterol (Chol) and 1,2-distearoyl-sn-glycero-3-phosphoethanolamine-N-[amino(polyethylene glycol)-2000]. Vesicles were characterised for size, entrapment efficiency, drug release and in vitro cytotoxicity. Radiolabelling of GCH was done using reduced technetium-99m to study biodistribution in Sprague-Dawley rats. Discrete and spherical, PEGylated and non-PEGylated spherulites with an average size of 200nm as seen in transmission electron microscopy had an entrapment efficiency of 76.28% and 77.42%, respectively. PEGylated spherulites showed sustained release followed by non-PEGylated and plain drug. GCH spherulites exhibited significantly higher cytotoxicity and apoptosis at reduced concentration than GCH solution. The radiolabelled complex showed high binding and radiolabelling efficiency. Gamma scintigraphy showed that GCH-loaded PEGylated spherulites were able to localise within lungs in higher concentration than non-PEGylated followed by plain drug.