Beta-oxidation is a metabolic process that breaks down fatty acids to generate energy. It occurs in the mitochondria of cells, where fatty acids are converted into acetyl-CoA, a molecule that enters the Krebs cycle to produce ATP, the energy currency of the cell. This process involves a series of enzymatic reactions that remove two carbon atoms at a time from the fatty acid chain. During beta-oxidation, each cycle produces one molecule of NADH and one molecule of FADH2, which are important for the electron transport chain, further contributing to ATP production. This process is essential for utilizing stored fat as an energy source, especially during periods of fasting or intense exercise.