Branching of the bronchi leads eventually to the bronchioles. Each bronchiole, with its further subdivision, is called a primary lung lobule. The bronchiolar wall contains smooth muscle but no cartilage, and is the principle site of bronchiolar constriction during an asthma attack. It is lined by ciliated cuboidal epithelium.

The alveolus is the site of gas exchange. The alveoli are lined by a single fine layer of non-ciliated cuboidal epithelium and are separated from the surrounding rich capillary network by the fine basement membrane of each.

The alveoli also contain Type II pneumocytes that produce lung surfactant to prevent alveolar air sacs from collapsing.