We present results from a study of bias and its evolution for galaxy-size h
alos in a large, high-resolution simulation of a low-density, cold dark mat
ter model with a cosmological constant. In addition to the previous studies
of the halo two-point correlation function, we consider the evolution of b
ias estimated using two different statistics: power spectrum b(P) and a dir
ect correlation of smoothed halo and matter overdensity fields bd. We prese
nt accurate estimates of the evolution of the matter power spectrum probed
deep into the stable clustering regime [k similar to (0.1-200) h Mpc(-1) at
z = 0] and find that its shape and evolution can be well described, with o
nly a minor modification, by the fitting formula of Peacock & Dodds. The ha
lo power spectrum evolves much slower than the power spectrum of matter and
has a different shape which indicates that the bias is time and scale depe
ndent. At z = 0, the halo power spectrum is antibiased (b(P) < 1) with resp
ect to the matter power spectrum at wavenumbers k similar to (0.15-30) h Mp
c(-1) and provides an excellent match to the power spectrum of the Automati
c Plate Measuring Facility (APM) galaxies at all probed k. In particular, b
oth the halo and matter power spectra show an inflection at k approximate t
o 0.15 h Mpc(-1), which corresponds to the present-day scale of nonlinearit
y and nicely matches the inflection observed in the APM power spectrum. We
complement the power spectrum analysis with a direct estimate of bias using
smoothed halo and matter overdensity fields and show that the evolution ob
served in the simulation in linear and mildly nonlinear regimes can be well
described by the analytical model of Mo & White, if the distinction betwee
n formation redshift of halos and observation epoch is introduced into the
model. We present arguments and evidence that at higher overdensities the e
volution of bias is significantly affected by dynamical friction and tidal
stripping operating on the satellite halos in high-density regions of clust
ers and groups; we attribute the strong antibias observed in the halo corre
lation function and power spectrum to these effects. The results of this st
udy show that despite the apparent complexity, the origin and evolution of
bias can be understood in terms of the processes that drive the formation a
nd evolution of dark matter halos. These processes conspire to produce a ha
lo distribution quite different from the overall distribution of matter, ye
t remarkably similar to the observed distribution of galaxies.