Arterioles facilitate and manage the flow of blood between the oxygen-rich arterial component of the circulatory system and the oxygen-poor venous loop. Dictionary.com describes arterioles as the smallest branches of an artery and notes that they terminate in capillary beds.
About.com Biology provides details about how arterioles function to encourage the circulation of oxygen-rich blood to the parts of the body that need it most. Each arteriole is equipped with a special valve, the precapillary sphincter, that opens and closes in response to the flexure and contraction of its tiny internal muscle. When open, these valves permit blood to flow out of the arterioles and into the capillary beds where gas and waste exchange can take place. When these valves are closed, arterial blood flows past the capillaries and directly into the venules through a structure called the thoroughfare channel. This has the effect of bypassing the surrounding tissue bed and shunting oxygen-rich blood to other areas of the body where it might be more urgently needed. An example of this process is the rerouting of blood to the digestive organs which arterioles undertake to improve the breakdown and absorption of nutrients from food. While blood is present in all parts of the body at all times, the capillary beds only contain blood when it is needed.