Recently, condensed matter and atomic experiments have reached a length-scale and temperature regime where new quantum collective phenomena emerge. Finding such physics in systems of photons, however, is problematic, as photons typically do not interact with each other and can be created or destroyed at will. Here, we introduce a physical system of photons that exhibits strongly correlated dynamics on a meso-scale. By adding photons to a two-dimensional array of coupled optical cavities each containing a single two-level atom in the photon-blockade regime, we form dressed states, or polaritons, that are both long-lived and strongly interacting. Our zero temperature results predict that this photonic system will undergo a characteristic Mott insulator (excitations localised on each site) to superfluid (excitations delocalised across the lattice) quantum phase transition. Each cavity's impressive photon out-coupling potential may lead to actual devices based on these quantum manybody effects, as well as observable, tunable quantum simulators.The Jaynes-Cummings [1] model is arguably the most important model for understanding light-matter interactions. It describes the interaction of a single, quasiresonant optical cavity field with a two-level atom. The coupling between the atom and the photons leads to optical nonlinearities and an effective photon-photon repulsion. Perhaps the most extreme demonstration of this photonic repulsion is photon blockade, demonstrated recently by Birnbaum et al. [2], where photonic repulsion prevents more than one photon from being in the cavity at any one time. Photon blockade was initially theoretically described with a four-state system [3], with multiplication of the weak Kerr nonlinearity effected by placing a large number of atoms within each cavity. However, it was quickly realised that the photonic blockade mechanism does not persist in the limit of many atoms [4], rapidly degrading as the number of atoms per cavity is increased [5]. Later Rebic et al. showed that the nonlinear interaction afforded by placing a single two-level atom inside a cavity would suffice for realising photon blockade [6]. This observation was highly significant as it allowed the full weight of the Jaynes-Cummings model to be used to attack and understand this problem.To create an atom-photon system whose dynamics mirror those traditionally associated with strongly interacting condensed matter systems, we consider a twodimensional array of photonic bandgap cavities. Each cavity contains a single two-level atom, quasi-resonant with the cavity mode. Evanescent coupling between the cavities due to their proximity allows inter-cavity photon hopping. This configuration is depicted schematically in Fig. 1(a), where we have explicitly chosen three nearest neighbours per cavity (coordination number z = 3), for reasons explained below. Because we are considering small cavities, with volumes of order λ 3 where λ is the wavelength of the light, there will be strong atom-photon couplings that will dominate over the...