We can inhale by lowering the diaphragm to expand the volume of the chest cavity. By the ideal gas law we know that an expanded volume will lower the pressure and allow air to flow into the lungs through the bronchial passages. Exhalation can be accomplished by just relaxing the chest and allowing the elastic recoil of the alveoli to force the air out of the lungs. This elastic recoil is related to the wall tension of the alveoli and behaves according to LaPlace's law.

Gas exchange in the lungs takes place in the tiny air sacs called alveoli in the lungs. The process of inhalation must inflate the alveoli, but it can only do so because of the presence of a surfactant fluid that coats the alveoli and lowers the surface tension of their walls.

Almost all the oxygen (over 98%) is carried in the blood by attachment to hemoglobin, a protein in the red blood cells. As oxygen is dissolved in the blood, it rapidly combines with the hemoglobin to form oxyhemoglobin. Each hemoglobin molecule can bind up to four oxygen molecules.