Susan Voisin from Fat Free Vegan explains that

"Nutritional yeast is made from a single-celled organism, Saccharomyces Cerevisiae, which is grown on molasses and then harvested, washed, and dried with heat to kill or “deactivate” it. Because it’s inactive, it doesn’t froth or grow like baking yeast does so it has no leavening ability. Don’t worry; no animals are harmed in this process because yeasts are members of the fungi family, like mushrooms, not animals." 
I have cooked two dishes with nutritional yeast so far, and it has been a groundbreaking discovery! It is used in most vegan recipes as a cheesy-like substitute. It is also important to say that it should not be replaced in vegan cooking with active dry yeast because it will make a different consistency given that nutritional yeast is inactive and will not expand like active yeast.