Alveoli are like tiny balloons filled with air and surrounded by blood vessels. The blood flowing into these vessels comes from all over your body. When the blood arrives at the alveolus, it is low in oxygen and high in carbo dioxide because cellular respiration in your body's cells has used up oxygen and produced carbon dioxide.
When you breathe in, air, rich in oxygen, fills the alveoli. By diffusion , oxygen moves from the air inside the alveoli into the blood. At the same time, carbon dioxide diffuses from your blood into the air inside the alveoli. In this way, the blood that flows away form your lungs carries a fresh supply of oxygen to all your body cells. The air inside the alveoli now has the carbon dioxide it received from the blood. This then travels out of your lungs and leaves your body through your mouth or nose.