What does the 'yield' keyword do in Python?

The 'yield' keyword in Python is used to define a generator, which is a special type of iterator. When a function contains the 'yield' statement, it transforms the function into a generator function. This means that instead of returning a single value and terminating its execution, the function can yield multiple values over time, pausing its state after each yield.

When the function is called, it does not execute the entire body at once; instead, it returns a generator object. Each time the generator's next() method is invoked, it resumes execution from where it left off, continues until it hits the next yield statement, and pauses again, storing its current state (including local variables). This allows for memory-efficient iteration over potentially large datasets, as values can be generated on-the-fly rather than stored all at once in memory.

In contrast, using 'return' would end the function completely and discard any local variables, which contrasts with the 'yield' behavior. Therefore, the correct understanding of 'yield' is that it pauses the function and saves its state for subsequent calls, allowing for a controlled, stateful iteration.