Note For 2021! See @Ely answer regarding UICollectionLayoutListConfiguration !!!!

In a vertical UICollectionView ,

Is it possible to have full-width cells, but, allow the dynamic height to be controlled by autolayout?

This strikes me as perhaps the "most important question in iOS with no really good answer."

Important:

Note that in 99% of cases, to achieve full width cells + autolayout dynamic height, simply use a table view. It's that easy.

So what's an example of where you need a collection view?

Collection views are far more powerful than table views.

One straightforward example where you must use a collection view with autolayout dynamic height:

If you animate between two layouts in a collection view. For example, between a 1 and 2 column layout, when the device rotates.

That's a common idiom in iOS. Unfortunately it can only be achieved by solving the problem posed in this QA. :-/

1. Solution for iOS 13+

With Swift 5.1 and iOS 13, you can use Compositional Layout objects in order to solve your problem.

The following complete sample code shows how to display multiline UILabel inside full-width UICollectionViewCell:

CollectionViewController.swift

import UIKit

class CollectionViewController: UICollectionViewController {

    let items = [
        [
            "Lorem ipsum dolor sit amet.",
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris. Lorem ipsum dolor sit amet, consectetur adipiscing elit.",
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.",
        ],
        [
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt.",
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.",
        ],
        [
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt.",
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.",
            "Lorem ipsum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris.",
        ]
    ]

    override func viewDidLoad() {
        super.viewDidLoad()

        let size = NSCollectionLayoutSize(
            widthDimension: NSCollectionLayoutDimension.fractionalWidth(1),
            heightDimension: NSCollectionLayoutDimension.estimated(44)
        )
        let item = NSCollectionLayoutItem(layoutSize: size)
        let group = NSCollectionLayoutGroup.horizontal(layoutSize: size, subitem: item, count: 1)

        let section = NSCollectionLayoutSection(group: group)
        section.contentInsets = NSDirectionalEdgeInsets(top: 10, leading: 10, bottom: 10, trailing: 10)
        section.interGroupSpacing = 10

        let headerFooterSize = NSCollectionLayoutSize(
            widthDimension: .fractionalWidth(1.0),
            heightDimension: .absolute(40)
        )
        let sectionHeader = NSCollectionLayoutBoundarySupplementaryItem(
            layoutSize: headerFooterSize,
            elementKind: "SectionHeaderElementKind",
            alignment: .top
        )
        section.boundarySupplementaryItems = [sectionHeader]

        let layout = UICollectionViewCompositionalLayout(section: section)
        collectionView.collectionViewLayout = layout
        collectionView.register(CustomCell.self, forCellWithReuseIdentifier: "CustomCell")
        collectionView.register(HeaderView.self, forSupplementaryViewOfKind: UICollectionView.elementKindSectionHeader, withReuseIdentifier: "HeaderView")
    }

    override func numberOfSections(in collectionView: UICollectionView) -> Int {
        return items.count
    }

    override func collectionView(_ collectionView: UICollectionView, numberOfItemsInSection section: Int) -> Int {
        return items[section].count
    }

    override func collectionView(_ collectionView: UICollectionView, cellForItemAt indexPath: IndexPath) -> UICollectionViewCell {
        let cell = collectionView.dequeueReusableCell(withReuseIdentifier: "CustomCell", for: indexPath) as! CustomCell
        cell.label.text = items[indexPath.section][indexPath.row]
        return cell
    }

    override func collectionView(_ collectionView: UICollectionView, viewForSupplementaryElementOfKind kind: String, at indexPath: IndexPath) -> UICollectionReusableView {
        let headerView = collectionView.dequeueReusableSupplementaryView(ofKind: UICollectionView.elementKindSectionHeader, withReuseIdentifier: "HeaderView", for: indexPath) as! HeaderView
        headerView.label.text = "Header"
        return headerView
    }

    override func viewWillTransition(to size: CGSize, with coordinator: UIViewControllerTransitionCoordinator) {
        super.viewWillTransition(to: size, with: coordinator)
        coordinator.animate(alongsideTransition: { context in
            self.collectionView.collectionViewLayout.invalidateLayout()
        }, completion: nil)
    }

}

HeaderView.swift

import UIKit

class HeaderView: UICollectionReusableView {

    let label = UILabel()

    override init(frame: CGRect) {
        super.init(frame: frame)
        backgroundColor = .magenta

        addSubview(label)
        label.translatesAutoresizingMaskIntoConstraints = false
        label.centerXAnchor.constraint(equalTo: centerXAnchor).isActive = true
        label.centerYAnchor.constraint(equalTo: centerYAnchor).isActive = true
    }

    required init?(coder aDecoder: NSCoder) {
        fatalError("init(coder:) has not been implemented")
    }

}

CustomCell.swift

import UIKit

class CustomCell: UICollectionViewCell {

    let label = UILabel()

    override init(frame: CGRect) {
        super.init(frame: frame)

        label.numberOfLines = 0
        backgroundColor = .orange
        contentView.addSubview(label)

        label.translatesAutoresizingMaskIntoConstraints = false
        label.topAnchor.constraint(equalTo: contentView.topAnchor).isActive = true
        label.leadingAnchor.constraint(equalTo: contentView.leadingAnchor).isActive = true
        label.trailingAnchor.constraint(equalTo: contentView.trailingAnchor).isActive = true
        label.bottomAnchor.constraint(equalTo: contentView.bottomAnchor).isActive = true
    }

    required init?(coder aDecoder: NSCoder) {
        fatalError("init(coder:) has not been implemented")
    }

}

Expected display:

2. Solution for iOS 11+

With Swift 5.1 and iOS 11, you can subclass UICollectionViewFlowLayout and set its estimatedItemSize property to UICollectionViewFlowLayout.automaticSize (this tells the system that you want to deal with autoresizing UICollectionViewCells). You'll then have to override layoutAttributesForElements(in:) and layoutAttributesForItem(at:) in order to set cells width. Lastly, you'll have to override your cell's preferredLayoutAttributesFitting(_:) method and compute its height.

The following complete code shows how to display multiline UILabel inside full-width UIcollectionViewCell (constrained by UICollectionView's safe area and UICollectionViewFlowLayout's insets):

CollectionViewController.swift

import UIKit

class CollectionViewController: UICollectionViewController {

    let items = [
        [
            "Lorem ipsum dolor sit amet.",
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris. Lorem ipsum dolor sit amet, consectetur adipiscing elit.",
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.",
        ],
        [
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt.",
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.",
        ],
        [
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt.",
            "Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.",
            "Lorem ipsum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris.",
        ]
    ]
    let customFlowLayout = CustomFlowLayout()

    override func viewDidLoad() {
        super.viewDidLoad()

        customFlowLayout.sectionInsetReference = .fromContentInset // .fromContentInset is default
        customFlowLayout.estimatedItemSize = UICollectionViewFlowLayout.automaticSize
        customFlowLayout.minimumInteritemSpacing = 10
        customFlowLayout.minimumLineSpacing = 10
        customFlowLayout.sectionInset = UIEdgeInsets(top: 10, left: 10, bottom: 10, right: 10)
        customFlowLayout.headerReferenceSize = CGSize(width: 0, height: 40)

        collectionView.collectionViewLayout = customFlowLayout
        collectionView.contentInsetAdjustmentBehavior = .always
        collectionView.register(CustomCell.self, forCellWithReuseIdentifier: "CustomCell")
        collectionView.register(HeaderView.self, forSupplementaryViewOfKind: UICollectionView.elementKindSectionHeader, withReuseIdentifier: "HeaderView")
    }

    override func numberOfSections(in collectionView: UICollectionView) -> Int {
        return items.count
    }

    override func collectionView(_ collectionView: UICollectionView, numberOfItemsInSection section: Int) -> Int {
        return items[section].count
    }

    override func collectionView(_ collectionView: UICollectionView, cellForItemAt indexPath: IndexPath) -> UICollectionViewCell {
        let cell = collectionView.dequeueReusableCell(withReuseIdentifier: "CustomCell", for: indexPath) as! CustomCell
        cell.label.text = items[indexPath.section][indexPath.row]
        return cell
    }

    override func collectionView(_ collectionView: UICollectionView, viewForSupplementaryElementOfKind kind: String, at indexPath: IndexPath) -> UICollectionReusableView {
        let headerView = collectionView.dequeueReusableSupplementaryView(ofKind: UICollectionView.elementKindSectionHeader, withReuseIdentifier: "HeaderView", for: indexPath) as! HeaderView
        headerView.label.text = "Header"
        return headerView
    }

}

CustomFlowLayout.swift

import UIKit

final class CustomFlowLayout: UICollectionViewFlowLayout {

    override func layoutAttributesForElements(in rect: CGRect) -> [UICollectionViewLayoutAttributes]? {
        let layoutAttributesObjects = super.layoutAttributesForElements(in: rect)?.map{ $0.copy() } as? [UICollectionViewLayoutAttributes]
        layoutAttributesObjects?.forEach({ layoutAttributes in
            if layoutAttributes.representedElementCategory == .cell {
                if let newFrame = layoutAttributesForItem(at: layoutAttributes.indexPath)?.frame {
                    layoutAttributes.frame = newFrame
                }
            }
        })
        return layoutAttributesObjects
    }

    override func layoutAttributesForItem(at indexPath: IndexPath) -> UICollectionViewLayoutAttributes? {
        guard let collectionView = collectionView else {
            fatalError()
        }
        guard let layoutAttributes = super.layoutAttributesForItem(at: indexPath)?.copy() as? UICollectionViewLayoutAttributes else {
            return nil
        }

        layoutAttributes.frame.origin.x = sectionInset.left
        layoutAttributes.frame.size.width = collectionView.safeAreaLayoutGuide.layoutFrame.width - sectionInset.left - sectionInset.right
        return layoutAttributes
    }

}

HeaderView.swift

import UIKit

class HeaderView: UICollectionReusableView {

    let label = UILabel()

    override init(frame: CGRect) {
        super.init(frame: frame)
        backgroundColor = .magenta

        addSubview(label)
        label.translatesAutoresizingMaskIntoConstraints = false
        label.centerXAnchor.constraint(equalTo: centerXAnchor).isActive = true
        label.centerYAnchor.constraint(equalTo: centerYAnchor).isActive = true
    }

    required init?(coder aDecoder: NSCoder) {
        fatalError("init(coder:) has not been implemented")
    }

}

CustomCell.swift

import UIKit

class CustomCell: UICollectionViewCell {

    let label = UILabel()

    override init(frame: CGRect) {
        super.init(frame: frame)

        label.numberOfLines = 0
        backgroundColor = .orange
        contentView.addSubview(label)

        label.translatesAutoresizingMaskIntoConstraints = false
        label.topAnchor.constraint(equalTo: contentView.topAnchor).isActive = true
        label.leadingAnchor.constraint(equalTo: contentView.leadingAnchor).isActive = true
        label.trailingAnchor.constraint(equalTo: contentView.trailingAnchor).isActive = true
        label.bottomAnchor.constraint(equalTo: contentView.bottomAnchor).isActive = true
    }

    required init?(coder aDecoder: NSCoder) {
        fatalError("init(coder:) has not been implemented")
    }

    override func preferredLayoutAttributesFitting(_ layoutAttributes: UICollectionViewLayoutAttributes) -> UICollectionViewLayoutAttributes {
        let layoutAttributes = super.preferredLayoutAttributesFitting(layoutAttributes)
        layoutIfNeeded()
        layoutAttributes.frame.size = systemLayoutSizeFitting(UIView.layoutFittingCompressedSize, withHorizontalFittingPriority: .required, verticalFittingPriority: .fittingSizeLevel)
        return layoutAttributes
    }

}

Here are some alternative implementations for preferredLayoutAttributesFitting(_:):

override func preferredLayoutAttributesFitting(_ layoutAttributes: UICollectionViewLayoutAttributes) -> UICollectionViewLayoutAttributes {
    let targetSize = CGSize(width: layoutAttributes.frame.width, height: 0)
    layoutAttributes.frame.size = contentView.systemLayoutSizeFitting(targetSize, withHorizontalFittingPriority: .required, verticalFittingPriority: .fittingSizeLevel)
    return layoutAttributes
}

override func preferredLayoutAttributesFitting(_ layoutAttributes: UICollectionViewLayoutAttributes) -> UICollectionViewLayoutAttributes {
    label.preferredMaxLayoutWidth = layoutAttributes.frame.width
    layoutAttributes.frame.size.height = contentView.systemLayoutSizeFitting(UIView.layoutFittingCompressedSize).height
    return layoutAttributes
}

Expected display:

Problem

You are looking for automatic height and also want to have full in width, it is not possible to get both in using UICollectionViewFlowLayoutAutomaticSize.

You want to do using UICollectionView so below is the solution for you.

Solution

Step-I: Calculate the expected height of Cell

1. If you have only UILabel in CollectionViewCell than set the numberOfLines=0 and that calculated the expected height of UIlable, pass the all three paramters

func heightForLable(text:String, font:UIFont, width:CGFloat) -> CGFloat {
    // pass string, font, LableWidth  
    let label:UILabel = UILabel(frame: CGRect(x: 0, y: 0, width: width, height: CGFloat.greatestFiniteMagnitude))
     label.numberOfLines = 0
     label.lineBreakMode = NSLineBreakMode.byWordWrapping
     label.font = font
     label.text = text
     label.sizeToFit()

     return label.frame.height
}

2. If your CollectionViewCell contains only UIImageView and if it's is supposed to be dynamic in Height than you need to get the height of UIImage (your UIImageView must have AspectRatio constraints)

// this will give you the height of your Image
let heightInPoints = image.size.height
let heightInPixels = heightInPoints * image.scale

3. If it contains both than calculated their height and add them together.

STEP-II: Return the Size of CollectionViewCell

1. Add UICollectionViewDelegateFlowLayout delegate in your viewController

2. Implement the delegate method

func collectionView(_ collectionView: UICollectionView, layout collectionViewLayout: UICollectionViewLayout, sizeForItemAt indexPath: IndexPath) -> CGSize {

    // This is just for example, for the scenario Step-I -> 1 
    let yourWidthOfLable=self.view.size.width
    let font = UIFont(name: "Helvetica", size: 20.0)

    var expectedHeight = heightForLable(array[indePath.row], font: font, width:yourWidthOfLable)


    return CGSize(width: view.frame.width, height: expectedHeight)
}

I hope this will help you out.

There are a couple of ways you could tackle this problem.

One way is you can give the collection view flow layout an estimated size and use systemLayoutSizeFitting to calculate the cell size.

Note: As mentioned in the comments below, as of iOS 10 you no longer need to provide an estimated size to trigger the call to func preferredLayoutAttributesFitting(_ layoutAttributes:) on the cell. Previously (iOS 9) would require you to provide an estimated size if you wanted preferredLayoutAttributes to be called.

(assuming you are using storyboards and the collection view is connected via IB)

override func viewDidLoad() {
    super.viewDidLoad()
    let layout = collectionView.collectionViewLayout as? UICollectionViewFlowLayout
    layout?.estimatedItemSize = CGSize(width: 375, height: 200) // your average cell size
}

For simple cells that will usually be enough. If the size is still incorrect, in the collection view cell you can override func preferredLayoutAttributesFitting(_ layoutAttributes: UICollectionViewLayoutAttributes) -> UICollectionViewLayoutAttributes, which will give you more fine-grain control over the cell size. Note: You will still need to give the flow layout an estimated size.

Then override func preferredLayoutAttributesFitting(_ layoutAttributes: UICollectionViewLayoutAttributes) -> UICollectionViewLayoutAttributes to return the correct size.

override func preferredLayoutAttributesFitting(_ layoutAttributes: UICollectionViewLayoutAttributes) -> UICollectionViewLayoutAttributes {
    let autoLayoutAttributes = super.preferredLayoutAttributesFitting(layoutAttributes)
    let targetSize = CGSize(width: layoutAttributes.frame.width, height: 0)
    let autoLayoutSize = contentView.systemLayoutSizeFitting(targetSize, withHorizontalFittingPriority: UILayoutPriorityRequired, verticalFittingPriority: UILayoutPriorityDefaultLow)
    let autoLayoutFrame = CGRect(origin: autoLayoutAttributes.frame.origin, size: autoLayoutSize)
    autoLayoutAttributes.frame = autoLayoutFrame
    return autoLayoutAttributes
}

Alternatively, instead, you can use a sizing cell to calculate the size of the cell in the UICollectionViewDelegateFlowLayout. If you use this method consider caching the size for performance.

func collectionView(_ collectionView: UICollectionView, layout collectionViewLayout: UICollectionViewLayout, sizeForItemAt indexPath: IndexPath) -> CGSize {
    let width = collectionView.frame.width
    let size = CGSize(width: width, height: 0)
    // assuming your collection view cell is a nib
    // you may also instantiate an instance of your cell if it doesn't use a Nib
    // let sizingCell = MyCollectionViewCell()
    let sizingCell = UINib(nibName: "yourNibName", bundle: nil).instantiate(withOwner: nil, options: nil).first as! YourCollectionViewCell
    sizingCell.autoresizingMask = [.flexibleWidth, .flexibleHeight]
    sizingCell.frame.size = size
    sizingCell.configure(with: object[indexPath.row]) // what ever method configures your cell
    return sizingCell.contentView.systemLayoutSizeFitting(size, withHorizontalFittingPriority: UILayoutPriorityRequired, verticalFittingPriority: UILayoutPriorityDefaultLow)
}

While these are not perfect production-ready examples, they should get you started in the right direction. I can not say this is the best practice, but this works for me, even with fairly complex cells containing multiple labels, that may or may not wrap to multiple lines.

I found a pretty easy solution for that issue: Inside of my CollectionViewCell I got a UIView() which is actually just a background. To get full width I just set the following Anchors

bgView.widthAnchor.constraint(equalToConstant: UIScreen.main.bounds.size.width - 30).isActive = true // 30 is my added up left and right Inset
bgView.topAnchor.constraint(equalTo: topAnchor).isActive = true
bgView.leftAnchor.constraint(equalTo: leftAnchor).isActive = true
bgView.rightAnchor.constraint(equalTo: rightAnchor).isActive = true
bgView.bottomAnchor.constraint(equalTo: bottomAnchor).isActive = true

The "magic" happens in the first line. I set the widthAnchor dynamically to the width of the screen. Also important is to subtract the insets of your CollectionView. Otherwise the cell won't show up. If you don't want to have such a background view, just make it invisible.

The FlowLayout uses the following settings

layout.itemSize = UICollectionViewFlowLayoutAutomaticSize
layout.estimatedItemSize = UICollectionViewFlowLayoutAutomaticSize

Result is a full width sized cell with dynamic height.