The effect of the environment on a quantum system is studied on an exactly solvable model: a harmonic oscillator interacting with a one-dimensional massless scalar field. We show that in an open quantum system, dissipation can cause decorrelation on a time scale significantly shorter than the relaxation time which characterizes the approach of the system to thermodynamic equilibrium. In particular, we demonstrate that the density matrix decays rapidly toward a mixture of ``approximate eigenstates'' of the ``pointer observable,'' which commutes with the system-environment interaction Hamiltonian. This observable can be regarded as continuously, if inaccurately, monitored by the scalar field environment. Both because in a harmonic oscillator the state of the system rotates in the phase space and because the effective environment ``measurement'' is weak, the system, on the short ``collision'' time scale (1/\ensuremath{\Gamma}), maintains a coherence in this pointer observable on time scales of order [\ensuremath{\gamma}/\ensuremath{\Omega}ln(\ensuremath{\Gamma}/\ensuremath{\Omega}${)]}^{1/2}$ and on longer time scales settles into a mixture of coherent states with a dispersion approximately consistent with the vacuum state. The master equation satisfied by the exact solution differs from the other master equations derived both for the high-temperature limit and for T=0. We discuss these differences and study the transition region between the high- and low-temperature regimes. We also consider the behavior of the system in the short-time ``transient'' regime. For T=0, we find that, in the long-time limit, the system behaves as if it were subject to ``1/f noise.'' The generality of our model is considered and its predictions are compared with previous treatments of related problems. Some of the possible applications of the results to experimentally realizable situations are outlined. The significance of the environment-induced reduction of the wave packet for cosmological models is also briefly considered.