Bees and wasps create nests in which to live.
Bees often live underground or in natural cavities, such as hollows in trees. In those places they construct hives where they store food and nurture their young. You might notice bees or hornets emerging from a hole, then you'll know that you've discovered a nest (but be sure to stay at a safe distance!).
Many bee and wasp species make nests with little rooms. Each room has just one egg and a supply of food (pollen for baby bees, paralyzed insects or spiders for baby wasps). The baby eats up its food, grows and transforms inside the nest, and emerges as an adult. These kinds of bees and wasps dig holes in the ground or in dead wood for these nests. Other wasps and a few bees (bumble bees and honey bees) make bigger nests, and bring their babies fresh food while the babies are growing.
Wasps often construct nests out of mud or a paper-like substance that they make using their saliva. Where do you see wasp nests? The large, round nests are sometimes suspended from the eaves of houses or from tree branches.
Another kind of wasp nest looks like a collection of cell-like chambers. In these chambers, young wasps develop from eggs, through the larval stage, and into adult wasps. When fully developed the wasps chew a hole in the wall of the nest to get out. You can see such holes in this picture of a wasp's nest made with mud.