Ultraluminous infrared galaxies (ULIRGs) are probably the local analogues o
f a major mode of galaxy formation in the early universe. Here we give a br
ief progress report on our on-going programme to study the nature and evolu
tion of ULIRGs. Our near-IR imaging of a large sample of these highly distu
rbed merger systems provides a data base of morphological parameters like t
idal features or projected separation of the nuclei. Together with ISO Mid-
IR spectroscopy these morphological parameters allow us to explore the merg
er dynamics and evolution of ULIRGs as they may progress from starburst to
buried AGN to exposed QSO. We find that the fraction of ULIRGs predominantl
y powered by AGNs increases with luminosity above similar to 3 x 10(12) L.,
but that there is no obvious trend for ULIRGs to be more AGN-like with mor
e advanced merger phase.