Much research has been done that has shown propolis to be an extremely important contributor to the health of a honey bee colony. Propolis is anti-microbial, anti-fungal, anti-bacterial, anti-viral, and anti-inflammatory.
It is a chemically complex substance that contains mainly balsams and resins that the foragers collect from the leaf buds and bark of certain plants. Propolis also contains added volatile oils and beeswax. The worker may also mix in salivary secretions, which are believed to act as a catalyst for biochemical changes in this resinous material.
Honey bees use propolis inside the hive as a cement and varnish to seal cracks smaller than bee space, and they also add it to comb - particularly in the brood nest. This not only strengthens the wax but may also provide some immunity for the brood.
In addition to this, honey bees have been seen to create a propolis "mat" at the entrance to their hive so that the returning foragers have to walk across it before entering the hive. There is a honey bee behavior called "kneading," or "washboarding," where the house bees work - or knead - the propolis on this "welcome mat." It is thought that they are regenerating it's healthful properties when they do so.
Honey bee colonies living in the wild tend to produce a lot of propolis inside their hive cavity, sometimes completely coating the interior of the hive with it. Unfortunately, the smooth interior walls of conventional Langstroth hives suppress this instinct. This phenomenon is so dramatic, in fact, that Dr. Seeley, in his article comparing how honey bees live in the wild with how they live in Langstroth hives, makes the statement that the interior of Langstroth hives "have no propolis coating."
Understanding the importance of supporting the bees' natural instinct to create propolis, I've designed my Bee Tree Hives hive bodies to do just that. The hive bodies create a smaller (7 frames wide), more vertical cavity that has rough interior surfaces on all four walls.
I love being able so simply look in the entrance of a Bee Tree Hive and see the amount of propolis production that's visible just right there.
Additional reading: Honey-Maker - How the Honey Bee Worker Does What She Does, by Rosanna L. Mattingly.