The origin of multicellular organisms and the mechanism of development in cell societies are studied by choosing a model with intracellular biochemical dynamics allowing for oscillations, cell–cell interaction through diffusive chemicals on a two-dimensional grid, and state-dependent cell adhesion. Cells differentiate due to a dynamical instability, as described by our “isologous diversification” theory. A fixed spatial pattern of differentiated cells emerges, where spatial information is sustained by cell–cell interactions. This pattern is robust against perturbations. With an adequate cell adhesion force, active cells are released that form the seed of a new generation of multicellular organisms, accompanied by death of the original multicellular unit as a halting state. It is shown that the emergence of multicellular organisms with differentiation, regulation, and life cycle is not an accidental event, but a natural consequence in a system of replicating cells with growth.