Nutritional yeast contains high levels of protein and folic acid. Many brands are also fortified with vitamin B12, an important nutrient that’s hard to get if you don’t eat meat. It tastes nutty and umami. That’s a good thing for vegetarians and vegans, who like to sprinkle it over savory foods and use it in nondairy cheese.
It’s actually the same species of fungus (Saccharomyces cerevisiae, and yes, yeast is a fungus) as brewer’s yeast and baker’s yeast, says Jo Stepaniak, author of The Nutritional Yeast Cookbook. But it’s grown on a molasses-based medium that produces more flavor than either brewer’s or baker’s yeast. After harvesting, nutritional yeast is heat-dried to “deactivate” (a.k.a. kill) it. That’s another thing that makes it different from the envelope of living yeast you use to make bread.
The term brewer’s yeast can refer to two different products: One is active yeast, used for making beer or wine (though depending on the style or varietal, other species of yeast may be involved in these processes). The other is sold in health food stores as a nutritional supplement and is deactivated through heating just like nutritional yeast, but it’s a byproduct of the brewing industry and can have an unpleasant bitter taste that makes it less useful in the kitchen. Extracts of this type of brewer’s yeast are made into Vegemite and Marmite.
Torula yeast, used in flavoring processed foods and sometimes as a nutritional supplement, is a completely different species of yeast (Candida utilis) that is a byproduct of papermaking.