Oxygen is used as an electron acceptor within the electron transport chain of aerobic respiration to generate adenosine triphosphate, or ATP. This compound is an essential component in intracellular energy transfer. Aerobic cellular respiration is in direct contrast of anaerobic respiration, which does not require oxygen.
Cellular respiration, whether aerobic or anaerobic, is a metabolic process which converts nutrient energy into ATP and waste products. In the human body, this translates into breaking down food into energy stored as sugars and then using that sugar to create ATP, which allows cells to perform vital life functions. ATP is essentially the "energy currency" which allows the energy transfer between sugar and cell to take place.
Aerobic respiration uses the oxygen gathered during the process of anatomical respiration (or breathing) to facilitate ATP synthesis. In this role, oxygen is an electron acceptor within the electron transport chain which synthesizes ATP from nutrients. To complete the ATP synthesis process, however, a variety of additional enzymes, principally ATP synthase, must also be present.
The aerobic cellular respiration process and oxygen's role within it are perhaps best understood by contrasting them with anaerobic cellular respiration. Anaerobic respiration takes place when an organism converts nutrients into ATP without the presence of oxygen in the electron transport chain. Substances such as fumarate, nitrate, sulfate or sulfur are used instead.