Two-stage fermentation is fermenting by using two fermenters instead of one. Most homebrewers will start out using only one fermenter. This fermenter is called the primary fermenter because it is the first vessel wort is transferred into. If the fermented wort is then transferred into another vessel, this is known as the secondary fermenter. Often, a smaller glass carboy will be used as a secondary fermenter. For 5 gallon batches, a 6.5 gallon fermenter is generally used as a primary and a 5 gallon fermenter is used as a secondary.

So, why would you want to take this extra step? The main purpose of the secondary vessel is to facilitate the settling of the yeast and to allow the beer to age. By transferring into a secondary fermenter, you're removing the beer from the layer of sediment that accumulated during primary fermentation. This prevents the beer from taking on off-flavors from this sediment. Additionally, yeast and other particles will fall out of your beer during secondary and greatly improve its clarity. This also improves and matures the flavor of your beer, since many of these particles can contribute to off-flavors. For these reasons, most beers will benefit from a secondary fermentation.