Alveolar function

The alveoli are the exact spot where air and blood make their exchange. There, oxygen crosses from the freshly inhaled air into the blood, and at the same time carbon dioxide makes the opposite trip, leaving the blood for the air that gets breathed back out. Everything else about breathing exists so that this crossing can happen.

There's a physical difficulty in that place: wet walls tend to stick to each other, like the two sides of a damp plastic bag that are hard to peel apart. That force pulling the surfaces together is called surface tension, and inside the alveolus surfactant reduces it. By lowering it, surfactant helps keep the alveolus from caving in, from collapsing, right at the moment the air is pushed out during exhalation.