Dispersive optical bistability and instabilities leading to period doubling, higher harmonics, and chaos in an all-optical passive quantum system are discussed theoretically and experimentally. These phenomena have been observed for a wide range of operating conditions in ring and Fabry-Perot resonators containing ammonia molecular gas as the nonlinear medium. Laser input intensity, gas pressure, and cavity tuning are the main control parameters in observation of these effects. The experimental results are well modeled by our generalization of standard two-level system theory to include standing-wave, reservoir, and transverse effects. © 1986 The American Physical Society.