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We discuss an open driven-dissipative many-body system, in which the competition of unitary Hamiltonian and dissipative Liouvillian dynamics leads to a nonequilibrium phase transition. It shares features of a quantum phase transition in that it is interaction driven, and of a classical phase transition, in that the ordered phase is continuously connected to a thermal state. We characterize the phase diagram and the critical behavior at the phase transition approached as a function of time. We find a novel fluctuation induced dynamical instability, which occurs at long wavelength as a consequence of a subtle dissipative renormalization effect on the speed of sound.