In the context of baking, fermentation typically refers to processes performed by yeasts and bacteria of converting sugars into energy. This process can create other things, such as CO₂ (gas), acidic molecules, alcohol (aka "the bready smell" when baking bread!) and what we humans would call "flavor compounds".

Humans have harnessed microbial fermentation by adding yeast and bacterial cultures to their baked goods to impart aeration and flavor. This is why adding yeast to breads and other things is called "biological leavening" because it differs from chemical leavening where we're adding the chemicals directly and instead adding the organisms that produce the gas/leavening for us.