People and animals breathe in oxygen and breathe out carbon dioxide because of a process called cellular respiration. During cellular respiration, oxygen is combined with food nutrients and water in order to produce usable energy in the form of adenosine tri-phosphate (ATP). The byproduct of this process is carbon dioxide, which is removed from the body through breathing.
Adenosine tri-phosphate, usually called ATP, is the basic usable type of energy that all cells can use. Human cells, animal cells and plant cells can all use ATP. It can be synthesized within the body through a number of processes, most commonly glycolysis and the citric acid cycle.