Fish breathe with gills, which are inside the fish’s head on each side of its throat.  The gills are made of a thin material that allows the fish’s blood to come close to the surface of the gills.  Water contains large amounts of oxygen.

When a fish breathes, it takes a mouthful of water, and then closes its mouth.  This forces the water pass the gills.  The oxygen in the water is absorbed through the think surfaces of the gills, and into the fish’s blood.  The water then leaves the fish’s body through narrow gill slits on each side of its heard.–Dick Rogers