A fundamental issue in evolutionary biology is the transition from unicellular to multicellular organisms, and the cellular differentiation that accompanies the increase in group size. Here we consider recent results on two types of “multicellular” systems, one produced by many unicellular organisms acting collectively, and another that is permanently multicellular. The former system is represented by groups of the bacterium Bacillus subtilis and the latter is represented by members of the colonial volvocalean green algae. In these flagellated organisms, the biology of chemotaxis, metabolism and cell–cell signaling is intimately connected to the physics of buoyancy, motility, diffusion, and mixing. Our results include the discovery in bacterial suspensions of intermittent episodes of disorder and collective coherence characterized by transient, recurring vortex streets and high-speed jets of cooperative swimming. These flow structures markedly enhance transport of passive tracers, and therefore likely have significant implications for intercellular communication. Experiments on the Volvocales reveal that the sterile flagellated somatic cells arrayed on the surface of Volvox colonies are not only important for allowing motion toward light (phototaxis), but also play a crucial role in driving fluid flows that transport dissolved molecular species. These flows, generated by the collective beating of flagella, confer a synergistic advantage with regard to transport of nutrients and chemical messengers. They allow these species to circumvent a nutrient acquisition bottleneck which would exist if transport were purely diffusive, and thereby evolve to larger multicellular individuals. In both cases, a higher level of organization, specialization and complexity counteract the higher costs inherent to larger groups.