We present near-infrared imaging of the host galaxies of 17 quasars at 1 < z < 2, obtained with ISAAC at the ESO VLT UT1 under excellent seeing (∼0.4 arcsec). The radio-loud (RLQ) and radio-quiet (RQQ) quasars in the sample have similar distribution of redshift and optical luminosity. Both RLQ and RQQ hosts follow the cosmic evolution of massive inactive ellipticals undergoing passive evolution. This indicates that nuclear activity can occur in all luminous ellipticals without producing a significant change in their global properties and evolution. However, there is a systematic difference by a factor ∼2 in the host luminosity between RLQs and RQQs, which remains the same from z = 2 to z = 0. Quasar hosts are already well formed at z ∼2, in disagreement with hierarchical models of AGN and galaxy formation and evolution models. No correlation is found between the nuclear and the host luminosities. If the host luminosity is proportional to the black hole mass, as in nearby massive spheroids, both types of quasars emit at very different levels with respect to their Eddington luminosity.To search for other articles by the author(s) go to: http://adsabs.harvard.edu/abstract_service.html