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This thesis reports original observations and theory of strong, induced excited state absorption and emission, known as avalanche upconversion, in thulium doped crystals. The nonlinear dynamics responsible for this phenomenon and its characteristic threshold are studied in great detail, and shown to consist of two distinct cooperative processes, namely near-neighbor cross relaxation(s) and excitation migration among more distant ion pairs. The temperature dependence of avalanche upconversion and cross relaxation in these materials is explained for the first time. Also, phase conjugation with threshold behavior and potential motion sensitivity for novelty filtering is demonstrated utilizing an avalanche nonlinearity. Complex, transverse ring structures observed in Gaussian beam propagation through avalanche media are explained on the basis of numerical simulations of avalanche-induced absorption and dispersion. Evidence is presented of coherent delocalization in Tm-doped solids, in the form of unexpected oscillations in the transient response to incident light pulses. Two theoretical approaches for describing avalanche behavior were compared. A rate equation analysis suitable for weak-coupled impurity ions was used to predict basic avalanche features, including increasing absorption and upconversion emission above a threshold, temporal delay of absorption, and temperature dependence of avalanche threshold. A density matrix approach suitable for arbitrary coupling reproduced these features but also predicted oscillations in excited state populations in the presence of significant interion coherence. This theory incorporated both near-neighbor cross relaxation which gives rise to induced absorption, and excitation migration among distant pair ions necessary for immensely magnifying the effect, in a single formalism. Studies of the concentration and temperature dependence of fluorescence decays of Tm ions from $\sp1$G$\sb4$ and $\sp3$H$\sb4$ states provided firm evidence of pair-wise cross relaxations of ions in both these states. Transient four-wave mixing experiments directly revealed energy migration among $\sp3$F$\sb4$ state Tm ions at a rate rapid enough to support the content ion that migration plays an important role in avalanche dynamics. Additional experiments yielded a temperature dependence of avalanche threshold in good agreement with theory, as well as avalanche phase conjugation and transverse propagation effects due to avalanche dynamics in accord with predictions.