In the lungs, oxygen and carbon dioxide (a waste product of body processes) are exchanged. This happens in the tiny air sacs (alveoli) at the end of the bronchial tubes. The alveoli are surrounded by capillaries. When a person inhales, oxygen moves from the alveoli to the capillaries. From there it goes into the bloodstream. At the same time, carbon dioxide moves from the bloodstream to the capillaries and into the alveoli. The carbon dioxide leaves the lungs when a person exhales.