A full treatment of decoherence and dephasing effects in BEC interferometry has been developed based on using quantum correlation functions for treating interferometric effects. The BEC is described via a phase space distribution functional of the Wigner type for the condensate modes and the positive P type for the non-condensate modes. Ito equations for stochastic condensate and non-condensate field functions replace the functional Fokker-Planck equation for the distribution functional and stochastic averages of field function products determine the quantum correlation functions.