Reproductive division of labor is a hallmark of multicellular organisms. However, the evolutionary pressures that give rise to delineated germ and somatic cells remain unclear. Here we propose a hypothesis that the mutagenic consequences associated with performing metabolic work favor such differentiation. We present evidence in support of this hypothesis gathered using a computational form of experimental evolution. Our digital organisms begin each experiment as undifferentiated multicellular individuals, and can evolve computational functions that improve their rate of reproduction. When such functions are associated with moderate mutagenic effects, we observe the evolution of reproductive division of labor within our multicellular organisms. Specifically, a fraction of the cells remove themselves from consideration as propagules for multicellular offspring, while simultaneously performing a disproportionately large amount of mutagenic work, and are thus classified as soma. As a consequence, other cells are able to take on the role of germ, remaining quiescent and thus protecting their genetic information. We analyze the lineages of multicellular organisms that successfully differentiate and discover that they display unforeseen evolutionary trajectories: cells first exhibit developmental patterns that concentrate metabolic work into a subset of germ cells (which we call “pseudo-somatic cells”) and later evolve to eliminate the reproductive potential of these cells and thus convert them to actual soma. We also demonstrate that the evolution of somatic cells enables phenotypic strategies that are otherwise not easily accessible to undifferentiated organisms, though expression of these new phenotypic traits typically includes negative side effects such as aging.