Arteries branch out into capillaries.
Capillaries are very small, and can't be seen without a microscope.
They carry the blood right up close to all of the body's cells, so that they can exchange materials.
They have permeable walls to allow substances to diffuse in and out.
They give the cells food and oxygen...
...and in return, they take the waste carbon dioxide from the cell.
The walls of capillaries are one cell thick.
This increases the rate of diffusion, as the distance it occurs over is increased.