Standard interpolatory subdivision schemes and their underlying interpolating refinable functions are of interest in CAGD, numerical PDEs, and approximation theory. Generalizing these notions, we introduce and study $n_s$-step interpolatory $M$-subdivision schemes and their interpolating $M$-refinable functions with $n_s\in \mathbb{N} \cup\{\infty\}$ and a dilation factor $M\in \mathbb{N}\backslash\{1\}$. We completely characterize $\mathscr{C}^m$-convergence and smoothness of $n_s$-step interpolatory subdivision schemes and their interpolating $M$-refinable functions in terms of their masks. Inspired by $n_s$-step interpolatory stationary subdivision schemes, we further introduce the notion of $r$-mask quasi-stationary subdivision schemes, and then we characterize their $\mathscr{C}^m$-convergence and smoothness properties using only their masks. Moreover, combining $n_s$-step interpolatory subdivision schemes with $r$-mask quasi-stationary subdivision schemes, we can obtain $r n_s$-step interpolatory subdivision schemes. Examples and construction procedures of convergent $n_s$-step interpolatory $M$-subdivision schemes are provided to illustrate our results with dilation factors $M=2,3,4$. In addition, for the dyadic dilation $M=2$ and $r=2,3$, using $r$ masks with only two-ring stencils, we provide examples of $\mathscr{C}^r$-convergent $r$-step interpolatory $r$-mask quasi-stationary dyadic subdivision schemes.
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