A formalism for describing the coherence and interference properties of two atomic clouds of Bose-Einstein condensates (BEC) is presented, which is applicable even in the opposite limits when the BEC clouds are initially coherent and when they are initially independent. First, we develop a mean-field theory wherein one mean-field mode is used, and then, for fragmented (i.e.,independent) condensates, we use a mean-field theory with two modes. We then develop a full two-mode field theory, with a field operator composed of a sum of two terms containing matter wave mode functions phi(1) and phi(2), that multiply the destruction operators of the modes, (a) over cap (1) and (a) over cap2. When atom-atom interactions are present and when the mode functions overlap, the matter wave mode functions phi(1) and phi(2) develop components moving to the right and left, and this results in interference fringes in the density. At the many-body level, another source of interference arises from expectation values of the form <(a) over cap (dagger)(i)(a) over cap (j)> with i not equal j, which become nonzero due to tunneling and interactions. We detail how these two sources of interference affect the density profile and the density-density correlation functions of Bose-Einstein condensates in the coherent and in the fragmented regimes.