The relationship between ambient particulate matter exposure and health has been well established. Ultrafine particles (UFP) with a diameter of 100 nm or less are known to increase pulmonary disease risk. Biological factors in dust containing UFP can cause severe inflammatory reactions. Pulmonary diseases develop primarily as a result of chronic inflammation caused by immune dysfunction. Thus, this review focuses on the adverse pulmonary effects of biological UFP, principally lipopolysaccharide (LPS), and bacterial extracellular vesicles (EVs), in indoor dust and the pathophysiological mechanisms involved in the development of chronic pulmonary diseases. The impact of LPS-induced pulmonary inflammation is based primarily on the amount of inhaled LPS. When relatively low levels of LPS are inhaled, a cascade of immune responses leads to Th2 cell induction, and IL-5 and IL-13 released by Th2 cells contributes to asthma development. Conversely, exposure to high levels of LPS induces a Th17 cell response, leading to increased production of IL-17, which is associated with asthma, COPD, and lung cancer incidence. Responses to bacterial EV exposure can similarly be broadly divided based on whether one of two mechanisms, either intracellular or extracellular, is activated, which depends on the type of the parent cell. Extracellular bacteria-derived EVs can cause neutrophilic inflammation via Th17 cell induction, which is associated with asthma, emphysema, COPD, and lung cancer. On the other hand, intracellular bacteria-derived EVs lead to mononuclear inflammation via Th1 cell induction, which increases the risk of emphysema. In conclusion, future measures should focus on the overall reduction of LPS sources in addition to the improvement of the balance of inhaled bacterial EVs in the indoor environment to minimize pulmonary disease risk.