Alveoli are smaller than grains of salt and there are 300 million of them in the lungs. The surfaces of the alveoli are covered with capillaries. These are narrow blood vessels which are one cell thick. Oxygen is passed from the alveoli into the bloodstream, which then distributes it to cells where it is used to unlock energy from food. The blood carries carbon dioxide, a waste product from the oxygen combusting with food in cells, back to the capillaries, where it goes back through the walls of the alveoli and is breathed out when you exhale, as waste.
Blood flows into the lungs from around the body.
It carries carbon dioxide produced by respiration in the cells of the body. Carbon dioxide passes from the blood into the alveoli. Then it is breathed out of the body. Oxygen is breathed into the lungs. It dissolves in the water lining of the alveoli.