The reagents are two carbonyl compounds together with a base. A proton is removed from one of them forming a negative charge on the α-carbon (the carbon just next to the C-O double bond). The negative charge can then attack the other carbonyl compound, forming the bond. The product is a β-hydroxy carbonyl compound, a molecule with a C-O double bond and an alcohol two carbon atoms down the chain. This reaction is very powerful because it can form a big molecule from two smaller ones.