We present a model for the nonlinear optical response of quantum wells, which includes biexcitons. We show that within this model, the interaction of two laser pulses, mediated by the nonlinear susceptibility, results in oscillations and in coupling between σ+ and σ- excitons. This explains the temporal behavior of the differential absorption and four-wave mixing in recent experiments [Phys. Rev. Lett. 68, 349 (1992); 68, 1880 (1992)]. The oscillations have a frequency equal to the biexciton binding energy, and are different from known interference and quantum beat phenomena. © 1993 The American Physical Society.