Despite the fact that most industrial processes for secondary metabolite production are performed with submerged cultures, a reliable developmental model for Streptomyces under these culture conditions is lacking. With the exception of a few species which sporulate under these conditions, it is assumed that no morphological differentiation processes take place. In this work, we describe new developmental features of Streptomyces coelicolor A3(2) grown in liquid cultures and integrate them into a developmental model analogous to the one previously described for surface cultures. Spores germinate as a compartmentalized mycelium (first mycelium). These young compartmentalized hyphae start to form pellets which grow in a radial pattern. Death processes take place in the center of the pellets, followed by growth arrest. A new multinucleated mycelium with sporadic septa (second mycelium) develops inside the pellets and along the periphery, giving rise to a second growth phase. Undecylprodigiosin and actinorhodin antibiotics are produced by this second mycelium but not by the first one. Cell density dictates how the culture will behave in terms of differentiation processes and antibiotic production. When diluted inocula are used, the growth arrest phase, emergence of a second mycelium, and antibiotic production are delayed. Moreover, pellets are less abundant and have larger diameters than in dense cultures. This work is the first to report on the relationship between differentiation processes and secondary metabolite production in submerged Streptomyces cultures.