The Infrared Astronomical Satellite (IRAS) has discovered a class of ultraluminous infrared galaxies (L ir > 1012 L ⊙) that are bolometrically as luminous, and slightly more numerous than optically selected quasars in the local universe (z ≲ 0.2). Ground-based observations of a complete sample of 10 of these infrared galaxies suggest that they represent the initial dust-enshrouded stages of quasars. A second group of ultraluminous objects selected on the basis of ‘warm’ infrared colors are found to be preferentially Seyfert galaxies. We suggest that these ultraluminous ‘warm’ objects represent the transition phase between the infrared selected and optically selected quasars.