Yeast magically transforms sweet wort into beer!
There are many different strains of yeasts, but the two major kinds of yeasts are "top-fermenting" ale yeasts and "bottom-fermenting" lager yeasts. Ale yeasts ferment beer more quickly at warmer (room) temperatures giving the beer a full-bodied, mellow character. Lager yeasts ferment at cooler temperatures (32-50 deg F) but more slowly, producing a cleaner, crisper beer. Your choice of yeast is probably the most significant factor in determining the actual "flavor" of your beer. Two batches of identical wort pitched with different yeasts will yield two distinctly different tasting beers.
Yeasts are packaged in several different forms. Dry yeast packages included in many extract kits are convenient and store well, but should be rehydrated prior to use. "Slap-packs" containing fresh yeast with a small, sealed container of growth medium which is broken a day or so prior to brewing can provide more viable yeast for your recipe. They also provide a wider selection of yeast strains than the dry packages, as do "slants" of yeast cultures which must be grown to pitch rates several days before a brew session.
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Yeast cells quickly multiply in cooled wort (70-80 deg F) and soon afterwards (within 24 hrs) begin to convert fermentable sugar into alcohol and carbon dioxide. When fermentation has completed, the yeast goes dormant and settles to the bottom of the fermenter. Remember that wild bacteria will also grow in wort and can spoil a good batch of beer, so sanitary methods are neccessary when handling cooled wort and yeast cultures to prevent contamination.
Yeast...