Glycerol is the main compatible solute in yeast Saccharomyces cerevisiae. When faced with osmotic stress, for example during semi-solid state bread dough fermentation, yeast cells produce and accumulate glycerol in order to prevent dehydration by balancing the intracellular osmolarity with that of the environment. However, increased glycerol production also results in decreased CO2 production, which may reduce dough leavening. We investigated the effect of yeast glycerol production level on bread dough fermentation capacity of a commercial bakery strain and a laboratory strain. We find that Δgpd1 mutants that show decreased glycerol production show impaired dough fermentation. In contrast, overexpression of GPD1 in the laboratory strain results in increased fermentation rates in high-sugar dough and improved gas retention in the fermenting bread dough. Together, our results reveal the crucial role of glycerol production level by fermenting yeast cells in dough fermentation efficiency as well as gas retention in dough, thereby opening up new routes for the selection of improved commercial bakery yeasts.