In the protein sequence space, natural proteins form clusters of families which are characterized by their unique native folds whereas the great majority of random polypeptides are neither clustered nor foldable to unique structures. Since a given polypeptide can be either foldable or unfoldable, a kind of “folding transition” is expected at the boundary of a protein family in the sequence space. By Monte Carlo simulations of a statistical mechanical model of protein sequence alignment that coherently incorporates both short-range and long-range interactions as well as variable-length insertions to reproduce the statistics of the multiple sequence alignment of a given protein family, we demonstrate the existence of such transition between natural-like sequences and random sequences in the sequence subspaces for 15 domain families of various folds. The transition was found to be highly cooperative and two-state-like. Furthermore, enforcing or suppressing consensus residues on a few of the well-conserved sites enhanced or diminished, respectively, the natural-like pattern formation over the entire sequence. In most families, the key sites included ligand binding sites. These results suggest some selective pressure on the key residues, such as ligand binding activity, may cooperatively facilitate the emergence of a protein family during evolution. From a more practical aspect, the present results highlight an essential role of long-range effects in precisely defining protein families, which are absent in conventional sequence models.