We begin by factoring the given expression \( a^4 b^4 - 16c^4 \). This is a difference of squares:
\[
a^4 b^4 - 16c^4 = (a^2 b^2 + 4c^2)(a^2 b^2 - 4c^2)
\]
Next, factor \( a^2 b^2 - 4c^2 \) as another difference of squares:
\[
a^2 b^2 - 4c^2 = (ab + 2c)(ab - 2c)
\]
Thus, the complete factorization is:
\[
a^4 b^4 - 16c^4 = (a^2 b^2 + 4c^2)(ab + 2c)(ab - 4c)
\]
Therefore, the correct answer is \( (a^2 b^2 - 4c^2)(ab + 2c)(ab + 4c) \).