We study the appearance of correlated many-body phenomena in an ensemble of atoms driven resonantly into a strongly interacting Rydberg state. The ground state of the Hamiltonian describing the driven system exhibits a second order quantum phase transition. We derive the critical theory for the quantum phase transition and show that it describes the properties of the driven Rydberg system in the saturated regime. We find that the suppression of Rydberg excitations known as blockade phenomena exhibits an algebraic scaling law with a universal exponent.