External respiration or breathing is a process of inhaling the air into the lungs and expelling the air that contains more carbon-di-oxide from the lungs to the outer environment. Exchange of gases in and out of the blood also takes place simultaneously. External respiration is a physical process in which oxygen is taken up by capillaries of lung alveoli and carbon-dioxide is released from blood.
Internal respiration or cellular respiration/tissue respiration is a metabolic process during which oxygen is released to tissues and carbon dioxide is absorbed by the blood. Once inside the cell the oxygen is utilized for production of energy in the form of ATP (adenosine triphosphate).