A review is given of the present state of theoretical and experimental work on the interaction of two coherent light beams of equal frequency in a nonlinear medium. It is shown that dynamic self-diffraction is substantially different for media with different types of response. Stationary energy transfer between interacting beams is possible in the case of nonlocal nonsymmetric response, whereas this type of transfer is forbidden in the case of local response. Different mechanisms for self-induced changes in the refractive index are examined together with the corresponding processes of energy transfer between the writing beams. The more important applications of dynamic self-diffraction are discussed.