Among the unsolved mysteries of modern biology is the nature of a lining of blood vessels called the ‘endothelial surface layer’ or ESL. In venous micro-vessels, it is half a micron in thickness. The ESL is 10 times thicker than the endothelial glycocalyx (eGC) at its base, has been presumed to be comprised mainly of water, yet is rigid enough to exclude red blood cells. How is this possible? Developments in physical chemistry suggest that the venous ESL is actually comprised of nanobubbles of CO2, generated from tissue metabolism, in a foam nucleated in the eGC. For arteries, the ESL is dominated by nanobubbles of O2 and N2 from inspired air. The bubbles of the foam are separated and stabilized by thin layers of serum electrolyte and proteins, and a palisade of charged polymer strands of the eGC. The ESL seems to be a respiratory organ contiguous with the flowing blood, an extension of, and a ‘lung’ in miniature. This interpretation may have far-reaching consequences for physiology.