A free alcohol group (properly called a hydroxyl, -OH) can hydrogen-bond, so the group tends to improve the aqueous solubility of the molecule bearing it. Under some circumstances the hydroxyl can be reactive; a typical reaction of hydroxyl groups is esterification (ester formation).
To form fatty acids, a hydroxyl is combined with a carboxylic acid by dehydration synthesis to form an ester (a fat has three of these ester groups). Hydrolysis of the ester cleaves the fat into a trihydroxyl-bearing glycerol and three fatty acids (each with its terminal carboxylic acid).
