Oxygen is absorbed in the lungs and transported all over the body by blood; when the blood releases its oxygen, it absorbs carbon dioxide (waste) and transports that back to the lungs, where it is expelled. This process is called respiration.
When the lungs fill with air, oxygen diffuses through the alveoli walls from the inhaled air into blood cells, exchanging with carbon dioxide, which diffuses out to the inhaled air from the blood cells. This process allows each blood cell to expel its waste, removing that waste from the human body where it could build up and cause damage; the new oxygen in the blood will be used by cells to change glucose into ATP.
When the blood reaches the very thin capillaries out in the body, it discharges its oxygen and takes on a load of carbon dioxide. The oxygen diffuses out of the blood through the capillary walls into the cells, while the carbon dioxide diffuses into the blood through the capillary walls from the cells.
This process is vital to the continuing good health of the body as oxygen is necessary for cells to continue their function; when a part of the body cannot receive oxygen, the cells begin to die and necrosis sets it. A part of the body, such as a foot, can die from lack of oxygenated blood flow, and will need to be amputated to lower the risk of gangrenous infection in the rest of the body.