Using high resolution, two-dimensional hydrodynamical simulations, we investigate the evolution of a self-gravitating multi-phase interstellar medium in the central kiloparsec region of a galactic disk. We find that a gravitationally and thermally unstable disk evolves, in a self-stabilizing manner, into a globally quasi-stable disk that consists of cold (T < 100 K), dense clumps and filaments surrounded by hot (T > 104 K), diffuse medium. In the quasi-stable phase where cold and dense clouds are formed, the effective stability parameter, Q, has a value in the range 2-5. The dynamic range of our multi-phase calculations is 106 – 107 in both density and temperature. Phase diagrams for this turbulent medium are analyzed and discussed. We also succeeded in modeling star formation in the multi-phase ISM with 2 pc resolution. Massive stars formed in the dense, cold clouds are tracked for their life time, and finally explode as SNe. The filamentlike structure of the cold gas is stable for the SNe, although bubbles of the hot gas (T > 106 K) are formed. We observed recurrent burst-like SNe production.