Hydrolyzed yeast protein is a hydrolysate of yeast protein derived by acid, enzyme, or other methods of hydrolysis. Hydrolysis breaks down the yeast protein into amino acids. This is done because large proteins can be difficult to incorporate into cosmetic formulations. Additionally, ingredients that undergo hydrolysis are better absorbed by the skin and hair. In cosmetics and personal care products, hydrolyzed yeast protein functions as a skin and hair conditioning agent.

In skin care products, hydrolyzed yeast protein improves the moisture content of skin, resulting in softer skin. Additionally, the amino acids in hydrolyzed yeast protein are thought to help skin achieve a brighter tone by targeting melanocytes. A melanocyte is a type of cell that produces melanin, the pigment that gives skin color. With age, melanocytes can become erratic and overproduce pigments that lead to dark spots. Hydrolyzed yeast protein is also used in hair conditioners because because it makes hair more manageable and easier to comb.