Alveoli are the air sacs that are in the form of tiny pouches or sac-like structures present inside the lungs. They are in the form of balloon-like structures which increase the surface area for inhalation of air composed of blood capillaries. The alveoli present in the lungs are more than millions that increase the surface area of the lungs for the exchange of gases. Thus, a large amount of air is brought in contact with the air in the lungs; this maximizes the exchange of gases in the lungs.