We study the ground-state properties of ultracold bosons in an optical lattice in the regime of strong interactions. The system is described by a non-standard Bose-Hubbard model with both occupation-dependent tunneling and on-site interaction. We find that for sufficiently strong coupling the system features a phase-transition from a Mott insulator with one particle per site to a superfluid of spatially extended particle pairs living on top of the Mott background -- instead of the usual transition to a superfluid of single particles/holes. Increasing the interaction further, a superfluid of particle pairs localized on a single site (rather than being extended) on top of the Mott background appears. This happens at the same interaction strength where the Mott-insulator phase with 2 particles per site is destroyed completely by particle-hole fluctuations for arbitrarily small tunneling. In another regime, characterized by weak interaction, but high occupation numbers, we observe a dynamical instability in the superfluid excitation spectrum. The new ground state is a superfluid, forming a 2D slab, localized along one spatial direction that is spontaneously chosen.
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