We derive dynamical equations for a driven, dissipative quantum system in which the environment-induced relaxation rate is comparable to the Rabi frequency, avoiding assumptions on the frequency dependence of the environmental coupling. When the environmental coupling varies significantly on the scale of the Rabi frequency, secular or rotating wave approximations break down. We avoid these approximations, yielding dynamical steady states which account for the interaction between driven quantum dots and their phonon environment. The theory, which is motivated by recent experimental observations, qualitatively and quantitatively describes the transition from asymmetric unsaturated resonances at weak driving to population inversion at strong driving.