Catabolism breaks down large molecules like proteins, lipids, carbohydrates, and nucleic acids into smaller units to release energy. This involves breaking molecular bonds through metabolic pathways. Examples provided include fats being broken into fatty acids and glycerol through hydrolysis, and amino acids being used to synthesize new proteins or oxidized to produce urea and carbon dioxide. The purpose of catabolism is to provide energy and material for the cell's anabolic reactions through the breakdown of macromolecules.