Micrometastases of colorectal cancer can remain dormant for years prior to the formation of actively growing, clinically detectable lesions (i.e., colonization). A better understanding of this step in the metastatic cascade could help improve metastasis prevention and treatment. Here we analyzed liver specimens of patients with colorectal cancer and monitored real-time metastasis formation in mouse livers using intravital microscopy to reveal that micrometastatic lesions are devoid of cancer stem cells (CSC). However, lesions that grow into overt metastases demonstrated appearance of de novo CSCs through cellular plasticity at a multicellular stage. Clonal outgrowth of patient-derived colorectal cancer organoids phenocopied the cellular and transcriptomic changes observed during in vivo metastasis formation. First, formation of mature CSCs occurred at a multicellular stage and promoted growth. Conversely, failure of immature CSCs to generate more differentiated cells arrested growth, implying that cellular heterogeneity is required for continuous growth. Second, early-stage YAP activity was required for the survival of organoid-forming cells. However, subsequent attenuation of early-stage YAP activity was essential to allow for the formation of cell type heterogeneity, while persistent YAP signaling locked micro-organoids in a cellularly homogenous and growth-stalled state. Analysis of metastasis formation in mouse livers using single-cell RNA sequencing confirmed the transient presence of early-stage YAP activity, followed by emergence of CSC and non-CSC phenotypes, irrespective of the initial phenotype of the metastatic cell of origin. Thus, establishment of cellular heterogeneity after an initial YAP-controlled outgrowth phase marks the transition to continuously growing macrometastases. Significance: Characterization of the cell type dynamics, composition, and transcriptome of early colorectal cancer liver metastases reveals that failure to establish cellular heterogeneity through YAP-controlled epithelial self-organization prohibits the outgrowth of micrometastases.