  We present observations of a major outburst at centimeter, millimeter,
optical, X-ray, and gamma-ray wavelengths of the BL Lacertae object AO
0235+164. We analyze the timing of multi-waveband variations in the flux and
linear polarization, as well as changes in Very Long Baseline Array (VLBA)
images at 7mm with 0.15 milliarcsecond resolution. The association of the
events at different wavebands is confirmed at high statistical significance by
probability arguments and Monte-Carlo simulations. A series of sharp peaks in
optical linear polarization, as well as a pronounced maximum in the 7 mm
polarization of a superluminal jet knot, indicate rapid fluctuations in the
degree of ordering of the magnetic field. These results lead us to conclude
that the outburst occurred in the jet both in the quasi-stationary "core" and
in the superluminal knot, both parsecs downstream of the supermassive black
hole. We interpret the outburst as a consequence of the propagation of a
disturbance, elongated along the line of sight by light-travel time delays,
that passes through a standing recollimation shock in the core and propagates
down the jet to create the superluminal knot. The multi-wavelength light curves
vary together on long time-scales (months/years), but the correspondence is
poorer on shorter time-scales. This, as well as the variability of the
polarization and the dual location of the outburst, agrees with the
expectations of a multi-zone emission model in which turbulence plays a major
role in modulating the synchrotron and inverse Compton fluxes.
