The origin of quantum interference characteristic of bound nonlinear systems is investigated within the Bohmian formulation of time-dependent quantum mechanics. By contrast to time-dependent semiclassical theory, whereby interference is a consequence of phase mismatch between distinct classical trajectories, the Bohmian, fully quantum mechanical expression for expectation values has a quasiclassical appearance that does not involve phase factors or cross terms. Numerical calculations reveal that quantum interference in the Bohmian formulation manifests itself directly as sharp spatial/temporal variations of the density surrounding kinky trajectories. These effects are most dramatic in regions where the underlying classical motion exhibits focal points or caustics, and crossing of the Bohmian trajectories is prevented through extremely strong and rapidly varying quantum mechanical forces. These features of Bohmian dynamics, which constitute the hallmark of quantum interference and are ubiquitous in bound nonlinear systems, represent a major source of instability, making the integration of the Bohmian equations extremely demanding in such situations. (C) 2003 American Institute of Physics.