Cooperation is central to the emergence of multicellular life; however, the means by which the earliest collectives (groups of cells) maintained integrity in the face of destructive cheating types is unclear. One idea posits cheats as a primitive germ line in a life cycle that facilitates collective reproduction. Here we describe an experiment in which simple cooperating lineages of bacteria were propagated under a selective regime that rewarded collective-level persistence. Collectives reproduced via life cycles that either embraced, or purged, cheating types. When embraced, the life cycle alternated between phenotypic states. Selection fostered inception of a developmental switch that underpinned the emergence of collectives whose fitness, during the course of evolution, became decoupled from the fitness of constituent cells. Such development and decoupling did not occur when groups reproduced via a cheat-purging regime. Our findings capture key events in the evolution of Darwinian individuality during the transition from single cells to multicellularity.