A many-body theory of quantum fluctuations in the optical parametric o
scillator is given. Dyson equations and diagrammatic representation of
photon Green functions are derived from a combination of quantum Lang
evin and many-body techniques. Single-photon Green functions are used
to compute dynamic spectra of the output using a self-consistent schem
e which incorporates nonlinear, many-photon polarization effects. The
latter scale with system size and their influence on the nonlinear qua
ntum dynamics is addressed. We present results of dynamic output spect
ra and quantum-noise properties beyond the adiabatic approximation.