After this Earth was created, God created Adam and Eve after his own image ( Genesis 1:27 ), and placed them in the Garden of Eden. Adam and Eve were the first of God's children to come to earth and obtain a physical body.
God gave Adam and Eve their Agency, which is the right and ability that each of us has to make good or bad choices. He also gave them the commandment to "multiply and replenish the earth" (Genesis 1:28) and not to partake of the forbidden fruit ( Genesis 2:16 - 17 , Moses 3:16-17 ). Obeying the second commandment meant that they could dwell forever in the Garden of Eden and dwell in God's presence. However, they could not progress and learn while they were in this state, as was part of the whole reason why this earth was created. They could not know what it means to feel joy and happiness, because they could not feel sorrow or pain. Without opposition in mortality, the opportunity for Adam and Eve to learn and progress was minimal. The Book of Mormon prophet, Lehi, explains this predicament very well in 2 Nephi 2:11 - 27.
Adam and Eve used their Agency to choose to eat the forbidden fruit. Because of their choice, they were separated from God's presence, and were cast out of the Garden of Eden. However, they were now able to know right from wrong, be able to have children, and experience joy and happiness, because they could understand sorrow and pain ( Moses 5:11 ) This was part of God's plan for us.
To learn more about Agency and the Fall of Adam and Eve, please click here.