We present a quantum-mechanical description of quark-hadron fragmentation in a nuclear environment. It employs the path-integral formulation of quantum mechanics, which takes care of all phases and interferences, and which contains all relevant time scales, like production, coherence, formation, etc. The cross section includes the probability of pre-hadron (colorless dipole) production both inside and outside the medium. Moreover, it also includes inside-outside production, which is a typical quantum-mechanical interference effect (like twin-slit electron propagation). We observe a substantial suppression caused by the medium, even if the pre-hadron is produced outside the medium and no energy loss is involved. This important source of suppression is missed in the usual energy-loss scenario interpreting the effect of jet quenching observed in heavy ion collisions. This may be one of the reasons of a too large gluon density, reported by such analyzes.