Abstract Ventilation delivers O2 to and removes CO2 from the lung. The circulation transports O2 and CO2 between the lung and the peripheral tissue. The mechanisms for the exchange of O2 and CO2 between the alveolar gas and pulmonary capillary blood are the subject of this chapter. These passive mechanisms can be influenced by outside factors, such as gravity and barometric pressure, and they are altered by most respiratory diseases. The factors determining efficiency of the exchange process can be separated into two major components: diffusion and matching of ventilation to perfusion (V)QJ. Furthermore, diffusion can be divided into three components: the gas phase, the alveolocapillary membrane, and the blood. The VA/Q ratio spans a broad range from zero (shunt, no ventilation) to infinity (dead space, no perfusion). Shunt is discussed as a special entity, although it represents only the extreme lower limit of the VA/Q range.