Here are the basics:
Yeasts are a type of fungus. Most fungi are multicellular, like mushrooms, but yeasts are unicellular (or single-celled, whichever you want to say is fine).
2. For reasons I won't get into, this process is most efficient when oxygen is around (it has to do with oxygen accepting electrons--see? Did you really want to know that?)
BUT, when there isn't any oxygen around, the system makes a switch and the process creates ethanol (a type of alcohol) as a side product.
Here is the human equivalent: When your muscle cells have a good supply of oxygen from your blood, they can get a lot of energy, and in turn, do great things for you when you are exercising. But if these cells don't get enough oxygen (because you're out of shape and your lungs and heart aren't up to the task), they'll still do what they have to do, but they will switch gears and work without oxygen. This will produce lactic acid (instead of alcohol because, well, we're not yeast) as a waste product, which is what causes muscle cramps.So the process of creating beer or wine (or whatever other alcoholic concoction you want) takes advantage of yeasts' abilities. Beer brewers mix a variety of grains and spices and add a certain variety of yeast (there are hundreds), and the yeast eats all the lovely sugars in the mix and release CO2 (carbonation) and ethanol (alcohol). This whole process is called fermentation, and beer brewers get all starry-eyed when you mention it. They may also drool.
Beer brewers go to great lengths to keep yeast happy because they so appreciate what yeast do, but sometimes I really feel like the yeast are taking advantage. Just a feeling.