Bronchioles are air passages of 1mm or less in diameter. Terminal bronchioles are lined with simple columnar/cuboidal ciliated epithelium with ciliated and non-ciliated Clara cells (which have secretory vesicles). They then branch further to give rise to respiratory bronchioles. The epithelium of bronchioles as they branch changes from pseudostratified ciliated columnar to simple ciliated columnar to simple cuboidal with ciliated cells and non-ciliated cells. The goblet cells are present in the larger diameter bronchioles, not the terminal or respiratory (except in smokers and others exposed to irritants in the air).