Yes, like other animals, chao will eventually die. Sad, isn't it? Anyway, on this page, I'll talk about chao's evolution and death. Here's just a quick image explaining it as simply as possible:
When a baby chao is fed enough chaos drives or animals, it will turn into the following: A Neutral Power Chao, A Neutral Running Chao, A Neutral Swimming Chao, A Neutral Flying Chao, Or A Neutral Stamina Chao. When the baby chao is cared for enough by a certain traited character, it will turn into the following: With a hero-traited character, it will become a 1st Evolution Hero Chao, and vise versa for the 1st Dark Chao. When a hero or darck chao is fed enough chaos drives or small animals it will become: A 1st Evolution Hero Power Chao, ect. You get the point, right? Any way, eventually, the chao will die. However, if you have treated your chao well, it will recarnate, which means it will go into a pink cacoon, and come back in an egg as a baby chao, with level one in stats. It will keep it's name and race/karate stats and badges. However, if you over-abused your chao, it will form a grey cacoon, and dissapear...forver...Oh well, life goes on hopefully. When your chao recarnates for the second time, depending on what traited fruits you fed it, it will become a a Chaos Chao. If you fed it Chao Nuts, it will be a Light Chao, a neutral chaos chao. If you fed it Hero Fruit, it will become an Angel Chao, a hero traited chaos chao. If you fed it Dark Fruits, it will become a Devil Chao, a dark traited chaos chao. Chaos Chao can never die, but can't mate. It's a fair trade. Though it can't die no matter how much you abuse it, treat it like a normal chao and give it respect! For more info on these types of chao, visit their assorted pages down at the bottom of the "Chao Info" assortment.