The present paper is organized as follows. In section 2, we introduce an interact- ing multicellular model which is further analysed in the present paper. Each cell has a simple functional module of genes, and its expression dynamics is modulated by the in- teractions with other cells. In sections 3 to 5, we consider several different intercellular interactions, respectively. Although possible cell states are generated by an intracellular functional module, selection of one of these possible states or establishment of specific number distributions of cell states is realized depending on the manner of intercellular interactions. In section 6, we extend our theoretical scheme to discuss the distribution of cell types in cell differentiation models studied so far (Kaneko and Yomo, 1997, 1999; Furusawa and Kaneko, 1998, 2001). Although these models have a complex intra-cellular reaction network, we show that the same logic can be applied to explain the cell differen- tiation observed in these models. In section 7, we summarize our results and discuss their biological relevance and future directions. Here we introduce a basic model of interacting cells with intracellular gene expres- sion dynamics. Consider N cells with identical genes which interact through a common medium. The internal state of i -th cell is represented by the expression pattern of m genes, as ⃗ u$_{i}$ = ( u 1 $_{i}$, . . . , u m i ) $^{T}$. The medium under which cells are placed is represented by concentrations of n diffuse signals given by ⃗ v = ( v$_{1}$, . . . , v$_{n}$ ) $^{T}$. As the simplest case, we discard the spatial configuration of cells so that each cell interacts with all the other cells via common signal chemicals ⃗ v . Each intracellular gene expression dynamics is modulated by these signal molecules, which give interactions with other cells. For the sake of simplicity, we mostly examine the dynamics of single gene expression, in which the state of the i -th cell is expressed by only one variable, u$_{i}$ , and the intercellular interaction is mediated by only one global diffusive signal, v . By using the standard kinetics of gene expression, { u$_{i}$ } and v are chosen to obey the following equation, 4 2 Framework of the Model