In 1857, Louis Pasteur discovered that yeast is a living organism whose activity causes fermentation.
Bread is made when dough is mixed with baker's yeast (Saccharomyces cerevisiae) which is unicellular fungus and allowed to stand for several hours. It is not inhibited by propionates, which are commonly added to baked goods like bread dough to inhibit mold development and bacterial growth.
Yeast cells undergo cellular respiration in order to produce energy due to the presence of carbohydrates in the flour, carbon dioxide and alcohol is produced in the process of anaerobic respiration(fermentation). Released of carbon dioxide swell up the dough which is known as leavening and the alcohol content in the dough evaporates, while the bread is baking.