Contractile injection systems (CIS) are bacteriophage tail-like structures that mediate bacterial cell-cell interactions. While CIS are highly abundant across diverse bacterial phyla, representative gene clusters in Gram-positive organisms remain poorly studied. Here we characterize a CIS in the Gram-positive multicellular model organism Streptomyces coelicolor and show that, in contrast to most other CIS, S. coelicolor CIS (CISSc) mediate cell death in response to stress and impact cellular development. CISSc are expressed in the cytoplasm of vegetative hyphae and are not released into the medium. Our cryo-electron microscopy structure enabled the engineering of non-contractile and fluorescently tagged CISSc assemblies. Cryo-electron tomography showed that CISSc contraction is linked to reduced cellular integrity. Fluorescence light microscopy furthermore revealed that functional CISSc mediate cell death upon encountering different types of stress. The absence of functional CISSc had an impact on hyphal differentiation and secondary metabolite production. Finally, we identified three putative effector proteins, which when absent, phenocopied other CISSc mutants. Our results provide new functional insights into CIS in Gram-positive organisms and a framework for studying novel intracellular roles, including regulated cell death and life-cycle progression in multicellular bacteria.