The difference between anaerobic and aerobic exercise lies in the presence of oxygen during the activity. Aerobic exercise involves prolonged, steady activities like running or cycling, where oxygen is sufficiently supplied to the muscles to produce energy. In contrast, anaerobic exercise includes short, high-intensity activities such as sprinting or weightlifting, relying on energy stores rather than oxygen. Anaerobic activities build muscle strength and power, while aerobic forms improve endurance and cardiovascular health.