The Phanerozoic Era was NOT when the first life formed. In fact, there is abundant evidence of life before the Cambrian Period, during the Pre-Cambrian Era. Macroscopic species existed 10's of millions of years before the Cambrian period. These creatures:
The Next Earliest Era: Proterozoic Era dates from 570 m.y.a. (start of the Phanerozoic Era) back to 2.5 b.y.a. During this time we see evidence of the oldest multi-celled life.
For the development of life, this period was the most critical. Very important environmental changes were occurring on Earth. It was these changes in the Earth's environment which separate the Proterozoic Era from the earlier Archean Era..
The development of Continental Crust was a direct result of development of a thicker Oceanic crust (perhaps as the internal heat form the Earth finally subsided and the crust could cool to a thicker level). This lead to an increase in tectonic activity of these new thicker plates. Through the subsequent subduction zones, the Earth saw a sudden increase in the amount of continental crust created (recall how continental crust is formed by subduction of oceanic crust, page 16 notes).
The evidence for increased Oxygen is found in rocks. Oxidized rocks began to appear in the geological record about 2.5 b.y.a. (previous to this, there was little oxygen in the atmosphere---The Archean Era).
Environmental changes were partially responsible for this, since volcanos are a source of CO2 gas and volcanism would be slowly diminishing with time. But the most important cause for changes in the atmosphere was the rise of photosynthetic bacteria and plants, producing O2.