A nonlinar dynamic theory is developed for the formation of photorefractive volume phase holograms. A feedback mechanism existing between the photo-generated field and free electron density, treated explicitly yields the growth and saturation of the space charge field in a time scale characterized by the coupling strength between them. The expression for the field reduces in the short time limit to previous theories and approaches in the long time limit the internal or photovoltaic field. Additionally, the phase of the space charge field is shown to be time dependent.