In Biology:
Lyse means to burst. Cells, particularily animal cells, autolyse when the tissue/animal dies. They become liquidy, change in colour, and tend to smell terribly. The tissue basically begins to rot. This is caused by a self-destruct mechanism, where the lysosomes release digestive enzymes.

In Baking:
A way of relaxing dough to maximize glutens and enhance extensibility without fermentation.

Autolyse (pronounced "auto lees") is a procedure bakers do to enhance the extensibility of the gluten strands. This is done as the very first step in the mixing of the dough. To do a proper autolyse one mixes all the water called for in the formula with all the flour. With the dough arm attachment (if one is using a mixer) one mixes this flour water mixture at slow speeds just until the water and flour are evenly mixed. After mixing the yet unformed dough is left to stand for at least 30 minutes before adding the rest of the ingredients and is further mixed to develop the gluten to the desired stage.

Some procedures would have you add 90% of the water for the autolyse, this will also do fine but is not necessary.

The idea here is to let the proteins in the flour absorb as much water as they can and allow for the best formation of gluten when the dough is subsequently worked. This process is usually done when making artisan breads that require very good gluten formation like in baguettes and hard rolls. It is an inexpensive step that makes a significant difference in your end product.

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