We study two quantum dots embedded in the arms of an Aharonov-Bohm ring threaded by a magnetic flux. The system can be described by an effective one-impurity Anderson model with an energy-and flux-dependent density of states. For specific values of the flux, this density of states vanishes at the Fermi energy, yielding a controlled realization of the pseudogap Kondo effect. The conductance and transmission phase shifts reflect a nontrivial interplay between wave interference and interactions, providing clear signatures of quantum phase transitions between Kondo and nonKondo ground states. Nanoscale quantum-dot devices are a formidable tool for probing the inherent quantum-mechanical nature of electrons. Manifestations of quantum electronic properties in these devices include wave interference in Aharonov-Bohm (AB) rings [1, 2, 3] and many-body phenomena such as the Kondo effect (the screening of a localized magnetic moment by conduction electrons) [3,4,5,6] and quantum phase transitions (QPTs) [6]. The interplay between quantum interference and the Kondo effect can be studied by inserting a quantum dot in an AB ring, as shown both experimentally [5] and theoretically [7,8,9].This Letter focuses on a system in which two quantum dots are embedded in the same AB ring. Interesting effects have been proposed [8] in cases where both dots are in the Kondo regime. Here, we consider instead a device in which the presence of one, effectively noninteracting dot creates for a second, Kondo-regime dot, an energy-dependent effective density of states that depends on the magnetic flux applied through the ring. Varying this flux can dramatically affect the Kondo state in the interacting dot, causing the Kondo temperature T K -the characteristic energy scale of the Kondo state-to range over many orders of magnitude.This two-dot AB device can also realize the conditions necessary for observation of the pseudogap Kondo effect [10,11], in which coupling of a magnetic impurity to a power-law-vanishing density of conduction states gives rise to a pair of QPTs between Kondo (T K > 0) and non-Kondo (T K = 0) phases. Pseudogap Kondo physics has previously been predicted to occur in doublequantum-dot devices [12,13], but the ring geometry of the present setup allows a deeper exploration of the interplay between coherent quantum interference and the Kondo effect. The conductance and transmission phase shift through the system exhibit clear signatures of each zero-temperature transition within a quantum-critical region that extends up to temperatures of order the maximum Kondo scale of the interacting dot. This robustness plus the relative ease of experimental control make the proposed device very promising for experimental investigation of pseudogap Kondo physics.Model.-Quantum dots ("1" and "2") are embedded in opposite arms of an AB interferometer that is connected to left ("L") and right ("R") metallic leads, as shown in Fig. 1(a). Dot 1 is in a Coulomb blockade valley and is occupied by an odd number of electrons, while dot 2 has a si...