The growing complexity of embedded systems software requires new techniques for their development. A common approach to reducing software complexity is to partition system behavior into different operational modes. Such a multi-mode system can change its behavior by switching between modes under certain circumstances. Another approach to simplifying software development is Component-Based Software Engineering, which allows a system to be developed by reusable components. Combining both approaches, we get component-based development of multi-mode systems, for which a key issue is the mode switch handling. Since most existing mode switch techniques do not consider component-based systems, we present in this article an approach—the Mode Switch Logic (MSL)—for the development of component-based multi-mode systems. Additionally, we provide a timing analysis for the mode switch of systems using our MSL. Finally, the fundamentals of MSL and its mode switch timing analysis are demonstrated and evaluated by a case study, an Adaptive Cruise Control system.