Aerobic and anaerobic respiration are two methods cells use to produce energy, but they operate differently. Aerobic respiration requires oxygen and is a multi-step process resulting in the production of carbon dioxide, water, and a significant amount of ATP, the energy currency of cells. In contrast, anaerobic respiration happens in the absence of oxygen, producing less ATP and leading to other products such as lactic acid in animals or ethanol and carbon dioxide in yeasts and certain bacteria.