The present invention provides a novel method for extending mold-free shelf life and for improving the flavor of baked goods by applying live yeast on the surface of the baked good after baking and cooling before packaging the baked good in closed bags and storing the packaged baked goods at ambient temperature. This method can be used for all kinds of baked goods including breads, rolls, bagels, pizza crusts, wheat flour tortillas, croissants, cakes, muffins, donuts and pita breads. This method can also be used to produce baked goods containing live probiotic yeast (Saccharomyces cerevisiae var. boulardii ).