The inhalational administration of drugs is a practical and non-invasive approach with the potential to reduce side effects and with a quick onset of therapeutic activity. Perillyl alcohol (POH) is a monoterpene with antitumor activity that currently is undergoing clinical evaluation as an inhalational anticancer agent. A detection method was developed that will be applicable to pharmacokinetic studies of not only POH, but also its longer-lived main metabolite, perillic acid (PA), in lung tissue and plasma after inhalational delivery. The anticancer activity of POH was investigated in vitro with the use of various lung cancer cell lines. Toxicity was established by a standard MTT assay, and apoptosis markers were analyzed by Western blot. For the detection of POH and PA in lungs and plasma, albino Wistar rats were used that were exposed to POH inhalation. Tissues were subjected to chromatographic separation on an Agilent Zorbax Eclipse XDB C18 column, followed by detection of absorption in the ultraviolet (UV) range. In vitro, POH exerted cytotoxic activity against six different lung tumor cell lines, and apoptotic cell death was indicated by induction of active caspase 3 and cleavage of poly (ADP-ribose) polymerase 1 (PARP1). These results demonstrate that inhalational delivery of POH results in effective biodistribution and metabolism of POH in the systemic circulation. In addition, our study introduces a simple, rapid HPLC-UV method with high accuracy for simultaneous detection of POH and its metabolite PA in plasma, and for sensitive detection of PA in lung tissue, which should prove useful for applications in clinical studies.