Blood flows from the heart to the arteries and arterioles, before branching into the capillaries. The capillaries are part of the micro-circulation of blood. A single capillary is so small that it allows only one blood cell to flow through it at a time.
The capillary walls are also very small, only one cell thick. These thin walls easily allow water, oxygen, carbon dioxide, and other nutrient and waste substances to exchange between blood cells and the surrounding tissue. For example, oxygen exits the blood cells and goes through the capillary wall to local tissue. The blood cells then pick up carbon dioxide waste from local tissue and transport it to the lungs for disposal.
Once capillaries have performed their function, they converge into venules, and then larger veins, returning blood to the heart. This begins another cycle of the circulatory system.