Yevamos, Chapter 2, Mishnah 3. The Mishnah lays down a rule distinguishing between women upon whom different types of prohibitions apply, and establishes the law for each of them regarding chalitzah and yibum.
"Klal amru bayevamah" - a general rule was stated concerning a yevamah:
"Kol shehu issur ervah - lo choletzes velo misyabemes" - a woman who falls under a prohibition of ervah, from the prohibitions we have dealt with until now, requires neither chalitzah nor yibum. She is an ervah and forbidden. And not only is she herself exempt from chalitzah and yibum, but her co-wife is exempt as well.
"Issur mitzvah ve'issur kedushah - choletzes velo misyabemes" - "issur mitzvah," as we will see in the next Mishnah, refers to an ervah of rabbinic origin: more distant categories of relationship that the Sages forbade. "Issur kedushah" refers to prohibitions such as those unique to kohanim, and others that we will see. These are not an ervah in themselves, they do not carry that severity and they do not carry the punishment of kareis, but only a negative commandment.
In these cases the obligation of yibum exists by Torah law and is not nullified, and nevertheless she undergoes chalitzah and is not taken in yibum. Yibum would place us in conflict with a Torah prohibition.
The reason for this:
The Sages said that by Torah law he would indeed fulfill the mitzvah of yibum with her, but the Sages did not want him to fulfill it: he would be permitted to be with her only one time, and once the mitzvah was fulfilled she would revert to being forbidden to him. Out of concern that they might continue the relationship, the Sages forbade even that first act. The obligation of chalitzah, however, remains in place, and therefore she undergoes chalitzah and is not taken in yibum.
"Achos zekukaso":
The next case in the Mishnah presents us with a concept called "achos zekukaso," the sister of the woman bound to him: two brothers are married to two sisters, both brothers die, and the two sisters fall to yibum before a third brother. For this brother neither woman is an ervah in her own right, but the ervah is created through the "zikah."
"Zikah" is the connection that exists between the yavam and the yevamah, the potential bond of yibum between them. It is not marriage, since they are not yet married, but the obligation to perform yibum is called zikah.
Consequently, whichever of the two widows he chooses to take in yibum is "achos zekukaso" - not the sister of his wife, but the sister of the woman with whom he has a relationship of zikah. In whichever direction he turns, this problem confronts him. And as we will see at the beginning of the third chapter, in a case of achos zekukaso she undergoes chalitzah and is not taken in yibum.
The novel teaching of the Mishnah:
Our Mishnah teaches us an exception to this law: if one of the sisters was an ervah to the surviving brother for some other reason - his daughter, his mother-in-law, and the like - the second sister is permitted. She is not "achos zekukaso," since there is no zikah to a sister who is an ervah.
Therefore the Mishnah says: "Achosah shehi yevimtah" - the sister of the ervah, where both fell to yibum together before that same man - "choletzes o misyabemes": she may undergo chalitzah or she may be taken in yibum, because she is not achos zekukaso, since her sister is an ervah to the surviving brother.
In summary: in this Mishnah we learned the general rule concerning a yevamah: an ervah does not undergo chalitzah and is not taken in yibum, and her co-wife is exempt as well; in a case of issur mitzvah or issur kedushah she undergoes chalitzah and is not taken in yibum, because the Sages forbade even the first act out of concern that the relationship would continue, while the obligation of chalitzah remains in place. We also examined "achos zekukaso" and the novel teaching of the Mishnah, that when one of the sisters is an ervah there is no zikah to an ervah, and therefore her sister may undergo chalitzah or be taken in yibum.