We study the coherence of interacting Bose condensates in recent magne
tic trap experiments. The coherent evolution manifests itself in the m
acroscopic interference of two independent Bose condensates. The theor
etical predictions from the time-dependent Gross-Pitaevskii equation a
re in excellent agreement with the measured interference patterns. A c
oherent coupling of two condensates represents the atomic analogon of
a Josephson junction. The dependence of the magnetic confinement on th
e nuclear spin orientation allows one to build a controllable beam spl
itter by magnetic resonance. The application of this beam splitter to
realize an atom laser is studied theoretically. The coherence of the o
utput beam is limited only by phase diffusion of the condensate.