A quantum kinetic equation for strongly interacting particles (generalized binary collision approximation, lander or T-matrix approximation) is derived in the framework of the density operator technique. In contrast to conventional kinetic theory, which is valid on large lime scales as compared to the collision (correlation) time only, our approach retains the full time dependencies, especially also on short time scales. This means retardation and memory effects resulting from the dynamics of binary correlations and initial correlations are included. Furthermore, the resulting kinetic equation conserves total energy (the sum of kinetic and potential energy). The second aspect of generalization is the inclusion of many-body effects, such as self-energy, i.e., renormalization of single-particle energies and damping. To this end we introduce an improved closure relation to the Bogolyubov-Born-Green-Kirkwood-Yvon hierarchy. Furthermore, in order to express the collision integrals in terms of familiar scattering quantities (Moller operator, T-matrix), we generalize the methods of quantum scattering theory by the inclusion of medium effects. To illustrate the effects of memory and damping, the results or numerical simulations are presented. (C) 1997 Academic Press.