Air is breathed in through the nose and the mouth. It makes its way down the trachea (windpipe) and enters into the lungs. The air enters into the small sacs of the lungs called alveoli which in a microscope look like a bunch of grapes. Oxygen in the air then dissolves into the water lining of the alveoli. The oxygen then diffuses through two walls - first the alveolar epithelium and secondly the capillary endothelium. It then attaches to red blood cells in the capillary. It has now entered into the blood from the external environment.