We study the evolution of the correlation function of dark matter halo
es in the CDM class of models. We show that the halo correlation funct
ion does not evolve in proportion with the correlation function of the
underlying mass distribution. The earliest haloes to collapse, which
correspond to rare peaks in the density field, cluster very strongly.
The amplitude of the halo correlation function decreases from its init
ial, large, value. This decrease continues until the average peaks hav
e collapsed, after which the amplitude grows slowly. This behaviour is
shown to be generic and the epoch of minimum amplitude depends only o
n the rms fluctuations in mass at the relevant scale and, to a much sm
aller extent, on the slope of the power spectrum at that scale. We dis
cuss the relevance of this result for interpretation of observations o
f galaxy and quasar clustering.