This paper intends to clarify some issues in the theory of quantum measurement by taking advantage of the self-consistent quantum formulation of nonlinear optics. A quantum-nondemolition measurement of the photon number of an optical pulse can be performed with a nonlinear Mach-Zehnder interferometer followed by a balanced detector. The full quantum-mechanical treatment shows that the shortcut in the description of the quantum-mechanical measurement, the so-called ‘‘collapse of the wave function,’’ is not needed for a self-consistent interpretation of the measurement process. Coherence in the density matrix of the signal to be measured is progressively reduced with increasing accuracy of the photon-number determination. The quantum-nondemolition measurement is incorporated in the double-slit experiment and the contrast ratio of the fringes is found to decrease systematically with increasing information on the photon number in one of the two paths. The ‘‘gain’’ in the measurement can be made arbitrarily large so that postprocessing of the information can proceed classically.

• Received 26 October 1992

DOI:https://doi.org/10.1103/PhysRevA.47.4585