The alveoli, alveoli ducts, respiratory bronchioles.
True respiration begins in the smallest bronchioles (respiratory bronchioles). They branch into alveolar ducts and finally into the tiny alveoli. They look like tiny bunches of grapes. This is where gas exchange happens. The capillaries carrying oxygen lie right up against the alveoli and form the respiratory membrane. Across this membrane the oxygen is traded for carbon dioxide. Respiration has occurred.