We report on the results of a multiwavelength campaign to observe the soft X-ray transient (SXT) and superluminal jet source GRO J1655-40 in outburst using HST,RXTE and CGRO together with ground-based facilities. This outburst was qualitatively quite different from other SXT outbursts and from previous outbursts of this source. The onset of hard X-ray activity occurred very slowly, over several months, and was delayed relative to the soft X-ray rise. During this period, the optical fluxes declined steadily. This apparent anticorrelation is not consistent with the standard disc instability model of SXT outbursts, nor is it expected if the optical output is dominated by reprocessed X-rays, as in persistent low-mass X-ray binaries.

Based on the strength of the 2175-Å interstellar absorption feature we constrain the reddening to be E(BV) = 1.2 ± 0.1, a result which is consistent with the known properties of the source and with the strength of interstellar absorption lines. Using this result we find that our dereddened spectra are dominated by a component peaking in the optical, with the expected ν1/3 disc spectrum seen only in the ultraviolet. We consider possible interpretations of this spectrum in terms of thermal emission from the outer accretion disc and/or secondary star, both with and without X-ray irradiation, and also as non-thermal optical synchrotron emission from a compact self-absorbed central source. In addition to the prominent He ii 4686-Å line, we see Bowen fluorescence lines of N iii and O iii, and possible P Cygni profiles in the ultraviolet resonance lines, which can be interpreted in terms of an accretion disc wind. The X-ray spectra broadly resemble the high-soft state commonly seen in black hole candidates, but evolve through two substates.

Taken as a whole, the outburst data set cannot readily be interpreted by any standard model for SXT outbursts. We suggest that many of the characteristics could be interpreted in the context of a model combining X-ray irradiation with the limit-cycle disc instability, but with the added ingredient of a very large disc in this long-period system.