The nonlinear interaction of light with matter is described from a quantum-statistical point of view. The phenomena of two-photon emission and two-photon absorption including both the single- and two-mode cases and the Raman effect are discussed in detail. A master equation for the density operator of the light fields alone is derived. This operator equation is converted to a c number equation and analytic solutions are obtained for the diagonal matrix elements of the density operator in the Fock representation. No linearizing approximation is introduced. These solutions allow one to compute the moments of the photon distribution for the above nonlinear processes.