Inhalation and exhalation are the two processes of external respiration. This breathing process oxygenates to the blood. It gets purified as carbon dioxide is removed from the blood. External respiration takes place in the lungs. Internal respiration is the process of respiration that takes place in the tissues and cells. Blood full of oxygen reaches the tissue where oxygen is used up during the energy production process and carbon dioxide is then taken by the blood to the lungs.