Simple squamous epithelium contains a single layer of thin irregularly shaped cells. Because the cells are very thin, substances like gases can readily pass through the single layer of cells. The transportation of gases is the function of simple squamous epithelium.
The alveoli (pl., alveolus) of the lungs contain a single layer of simple squamous epithelium. Alveoli are also called terminal air sacs, pulmonary membranes, and basement membranes. Respiratory gases like oxygen and carbon dioxide (and other substances) readily diffuse across this membrane in the alveolus thus making the exchange between air (oxygen) and blood possible. The oxygen is absorbed into the blood and carried to distant parts of the body by the hemoglobin molecule.
it lines the blood vessels, the coelom, the urinary tubules and alveoli of the lungs.
it provides protection to the underlying parts against abrasion(mechanical injury) and entry of germs or chemicals
it also helps in excretion , gas exchange and secretion of coelomic fluid