In the respiratory tract, gas exchange takes place in the alveoli of both of the lungs. The alveoli are small sacs of air that are covered in a material known as surfactant. This substance allows the alveoli to expand and contract during inhalation and exhalation.
Millions of alveoli line each of the lungs in the human body. Each alveoli connects with capillaries through a thin basement membrane. Gases such as oxygen and carbon dioxide diffuse across the thin basement membrane and are exchanged between the alveoli of the lungs and the capillaries. Gas exchange occurs by the process of diffusion.