MOTIVATION: Cell growth and division affect the kinetics of internal cellular processes and the phenotype diversity of cell populations. Since the effects are complex, e.g., different cellular components are partitioned differently in cell division, to account for them in silico, one needs to simulate these processes in great detail. RESULTS: We present SGNS2, a simulator of chemical reaction systems according to the Stochastic Simulation Algorithm with multi-delayed reactions within hierarchical, interlinked compartments which can be created, destroyed and divided at runtime. In division, molecules are randomly segregated into the daughter cells following a specified distribution corresponding to one of several partitioning schemes, applicable on a per-molecule-type basis. We exemplify its use with six models including a stochastic model of the disposal mechanism of unwanted protein aggregates in Escherichia coli, a model phenotypic diversity in populations with different levels of synchrony, a model of a bacteriophage's infection of a cell population, and a model of prokaryotic gene expression at the nucleotide and codon levels. AVAILABILITY: SGNS2, instructions and examples available www.cs.tut.fi/~lloydpri/sgns2/ (open source under New BSD license).