Yeast is a microscopic life form related to fungi. It's eukaryotic, which means that the nucleus and other organelles are protected by a membrane. Bakers generally use two types of yeast: dry or compressed.
The type of yeast used in cooking and other food preparation helps make bread rise and works to ferment alcoholic beverages like whiskey and beer. It is also added to cheese.
The quality of yeast that makes it so attractive to cooks is that it reproduces very quickly. Some yeasts reproduce by budding; a part of the cell wall swells. Eventually, a cellulose wall cuts off the bud from the parent yeast. It soon becomes independent and starts to grow buds of its own. Other types of yeast cells simply split in two.
Yeast works by creating enzymes that attack the complex sugars in flour and break them down into simple sugars. The sugar is then changed into alcohol and carbon dioxide. The gas bubbles up through the dough and causes it to rise and become light and porous. If the bread is then baked the right way, the alcohol evaporates, and the yeast is killed. In the end, there should be no taste of either yeast or alcohol.