A newly developed, multiply nested, movable mesh, fully compressible, nonhydrostatic tropical cyclone model - TCM4 is documented and used to investigate how the asymmetric structure develops in an initially axisymmetric tropical cyclone without any explicit asymmetric forcing. For this purpose, the model is configured on an f-plane and initialized with an axisymmetric cyclonic vortex in a quiescent environment with a constant sea surface temperature of 29 degrees C. To isolate the effect of moist processes, a dry experiment with model physics turned off and a full physics experiment with full model physics included are performed. The results show that the initial development of asymmetries results from the numerical finite-differencing scheme on a regular square grid system and time-splitting error associated with the horizontal advection. The computational asymmetries are dominated by azimuthal wavenumber-two and wavenumber-four components. In the dry experiment, because the initial cyclonic vortex has a monotonic radial distribution of potential vorticity and thus is dynamically stable, the computational asymmetries could not grow further after their initiation and remain very weak and stationary, thus having little effect on the overall evolution of the dry vortex in the model. In the moist experiment, the initial development of asymmetries is quite similar to that in the dry experiment before the development of significant convection. However, once convection bursts near the original radius of maximum wind, the asymmetries are dominated by small-scale convective activities near the original radius of maximum wind. The rapid convective outbursts generate strong gravity waves that propagate radially outward. After some dynamical adjustments between 6 and 12h of simulation, convection is mainly trapped in the inner core region of the vortex. Convective heating associated with the inner core convection produces an off-center local PV maximum of the azimuthal mean vortex in the mid-lower troposphere. The reverse of the radial PV gradient across this PV annulus satisfies the necessary condition for barotropic instability, resulting in a rapid development of large amplitude asymmetries in the inner core region with low azimuthal wavenumbers. These asymmetries are characterized by vortex Rossby waves. It is also found that these physical modes are slightly modified by quasi-stationary computational asymmetries. Although the amplitude of the computational modes is relatively small compared to the physical modes, interpretation of the asymmetries in the inner core region at any given time, especially the wavenumber-two component, needs to be with caution. We have found no indication of contribution by inertial instability in the outflow layer to the development of asymmetries in the inner core region of our simulated storm.