We present a many-body theory of a driven and damped trapped gas of in
teracting bosons, and demonstrate that one of the trap levels can beco
me coherently populated, thereby leading to a coherent atomic-beam gen
erator, or ''laser for atoms.'' The specific system we consider consis
ts of a sample of bosonic atoms interacting via the near-resonant dipo
le-dipole interaction. The transverse center-of-mass motion of the ato
ms is confined by a two-dimensional potential well created by an array
of cooling laser beams, while their longitudinal motion is quantized
by a Fabry-Perot for atoms. Under appropriate conditions, the dipole-d
ipole selection rules lead to the simplification that only two quantiz
ed levels of atomic motion need to be considered explicitly, the other
levels being treated as reservoirs. One of the two levels is the ''pu
mp level,'' while the other is the one where atomic coherence builds u
p (the ''lasing'' level). The master equation describing the dynamics
of these levels can be solved numerically, and its solution exhibits a
''threshold behavior'' with a transition from super-Poissonian to Poi
ssonian atom statistics in the ''lasing mode.''