Mulholland Dr. is a movie about Hollywood and the American night. That is, its Hollywood is one that exists in the movies. It is photographed in a sort of half-light, illuminated by single bulbs and cloaked in shadows that leave characters teetering on the edge of an inky blackness. When Betty, an impossibly fresh young thing who wants to be an actress, arrives there from Canada, it seems that another wide-eyed innocent is about to get dragged through the muck. Happily, Lynch has something more complicated in mind.

After some brief vignettes, including the colorful, many-layered jitterbug dance sequence that opens the film, Lynch’s Hollywood noir begins to roll as a limousine makes its way slowly down the titular winding road, which snakes through the Hollywood Hills and overlooks the city. A woman in the back seat becomes the only survivor of a car accident that leaves her a bloodied and confused amnesiac with stacks of cash in her purse. She wanders down into the lights of Hollywood and sneaks into an empty apartment where she’s soon discovered by Betty, whose aunt owns the place. Betty at first assumes that "Rita," as she identifies herself after spying a Gilda one-sheet on the wall, is a family friend. When she discovers that the woman is in fact a complete stranger, and perhaps dangerous to know, she's less concerned with her own welfare than with penetrating the mysteries of the woman’s life.

Mulholland Dr. has a rather involved history, beginning life as an 88-minute pilot for an ABC television series. Once the pilot was completed and edited according to the network’s various stipulations, ABC rejected it. CanalPlus stepped in, buying the material back and giving Lynch money to shoot what must have amounted to about an extra hour of new footage, most of which was grafted cleanly onto the end of the existing film. (The screenplay for the original pilot has been widely circulated on the Internet.) The resulting work is substantially a gripping and menacing mystery yarn, but it suddenly gives way to flamboyance and eroticism.

The balance between these two worlds is at best uneasy. The tonal shift is as jarring in its way as the surreal psychodrama of Twin Peaks: Fire Walk With Me was in comparison to early episodes of Lynch’s Twin Peaks. The Twin Peaks pilot, one of Lynch’s finest works, shares similar moods with Mulholland Dr. Taken as a whole, however, the new film may be more akin to Lost Highway, a notorious Möbius strip of a movie that drove me nuts in its insularity. What’s remarkable is that, this time around, Lynch makes the structure of Lost Highway -- in which conventional storytelling gave way to an interior narrative taking place as the lead character, crucially, reinvented himself -- cohere among characters about whom an audience not comprised of Lynchophiles could reasonably be expected to give a shit. Time will tell if this one has the staying power of Lynch's most irreplacable work, but Mulholland Dr. is a compelling summation of the director’s career to date and his best feature since Blue Velvet.

Betty is this film’s equivalent of Blue Velvet’s Jeffrey Beaumont. Lynch treats her very well -- she may be generous to a fault, but she never seems foolish, and her headstrong investigation is Rita’s best and only chance at discovering the secret of her own identity. Naomi Watts plays Betty as an almost preternaturally kind and unassuming ingénue, but one with acting talent and a formidable sexuality lurking just beneath her good-girl surface. It comes to the fore in an extraordinary scene in which she auditions for a role with her body pressed tightly against that of a sun-tanned creep from Central Casting. It’s a defining Lynch moment depicting the essential salaciousness of Hollywood, where aging sharks sniff out ambitious young women to be their willing capitulators.

As Watts begins to simmer, her houseguest seems responsible for turning up the heat. Played by former Miss USA and ex-countess Laura Harring with ample-bosomed, Anita Ekberg-style glamour, "Rita" is an erotic accident waiting to happen. (Even her assumed name is a symbol of brazen Hollywood sex appeal.) What’s typical in Lynch’s work is an affinity for exploitation themes, filtered through an American history that combines 50s and 60s idealism with contemporary violence and despair, and Mulholland Dr. does have the amusing whiff of lesbian pulp fiction about it. When Betty first discovers her, Rita is taking a shower, the curves of her body abstracted through scalloped glass. In this instance, both the amnesiac seductress and the naïve seductee remain innocent, but Lynch’s fascination with sexual deviance eventually holds sway. Had the project remained on television, the relationship may never have been consummated but when Lynch throws standards and practices out the window and lets Rita drop her towel, the immediately ensuing sex scene is key to the film’s ultimate meaning. That meaning is superficially elusive, and a kind of mental leap is required to sort out exactly what happens in Mulholland Dr.’s final, explicative scenes. Suffice it to say that we suddenly learn a lot of new things, in rapid succession, about the psychology of all of these characters.

Hot lesbian sex aside, Lynch’s handling of the friendship between Betty and Rita is nuanced and surprisingly sensitive. Among the hazards of exploitation films are cheaply stereotyped characters, but Lynch’s direction is gentle and the performances sure, pulling the film from each pulpy situation with renewed weight and conviction. Oh yes, Lynch takes this stuff seriously, jazzing things up with more sheerly cinematic flair than he’s shown in years. Mulholland Dr. could be described as a movie about a dream about Hollywood. The audio design, credited to Lynch, throbs with amplified ambient sound that suggests not just the ever-present noise of the city, but also, by literally surrounding the viewer, the expansive and unexplored spaces inside one’s own head. The helicopter shots peering straight down between skyscrapers as the booming sound of the city fills the movie theater are incredibly eerie, capturing the uneasy feeling of being alone, downtown, in the middle of the night.

In collaboration with cinematographer Michael Deming, Lynch bathes his images in unease. His camera can best be described as floating, often moving vertically within a scene and looking down upon the characters, or sucking us forward into a point-of-view that we're not sure we want to share. The image snaps in and out of focus at key moments (while one character masturbates, for instance) again underscoring the connection between the psychology of the characters and the moving images that they inhabit.

I was reminded repeatedly of Ingmar Bergman’s Persona, which also examines at close range the relationship between two women, one of them an actress, and which is also awash in reflexive elements that turn its status as cinema back on itself. One particular shot in Mulholland Dr. strongly echoes a famous image from Persona showing the face of one woman in profile, perfectly aligned with the other, who is facing forward. (I shuddered when, at a climactic moment, the print of Mulholland Dr. I was viewing slipped in the gate and melted before my eyes -- an explicit yet wholly serendipitous mirror of a scene in the Bergman film that’s capped by the film catching and burning.)

One of Lynch’s best features is his sense of humor, which runs to the pitch black. Mulholland Dr. has a handful of very funny scenes, one of them a full-fledged set piece involving a botched murder that has little, if anything, to do with the rest of the film. Justin Theroux plays movie director Adam Kesher, an obvious Lynch surrogate who is treated very badly by his bosses. Billy Ray Cyrus has a funny cameo as a pool cleaner, and Lynch crony Monty Montgomery nearly steals the whole movie as a dead-eyed cowboy who sizes up Kesher with uncompromising horse sense. (Lynch’s dialogue, especially in this scene, is even better than usual.) Twin Peaks midget Michael J. Anderson shows up in a wheelchair (this time with a full-size prosthetic body) and composer Angelo Badalamenti cameos as a mobster with a thing for espresso.

At its most baffling, Mulholland Dr. seems scrutable only by finding the doubles that infest it. An inexplicable sequence at a nightclub called Silencio, for instance, seems to echo an earlier scene in which Adam auditions actresses by watching them lip-sync to a Connie Stevens song. Lynch may be commenting slyly on the process of "discovering" talent (or discovering "talent"), or merely observing that Hollywood has always moved audiences to tears with with an art form at the heart of which is an essential phoniness. Mulholland Dr. is not about Hollywood as an actual place as much as it is about what "Hollywood" has come to mean in the collective consciousness.

The vaguely retro images and old Hollywood nostalgia dovetail with earlier Lynch films, where he seemed to view the world partly from the vantage point of the early 1960s. There are other reminders of the director’s body of work, such as Rita’s emergence from the ruined limousine, which mirrors Sherilyn Fenn’s cameo as an accident victim in Wild at Heart -- it’s my world, he seems to say, and you're just written into it. More significantly, Mulholland Dr. shares with other Lynch projects the sense that people are not what they seem, that they are under the influence of an outside intelligence or, alternately, that they have become delusional about their own identities. In fact, such loss of one’s own identity is one of Lynch’s great themes. It seemed like a silly gimmick and a cop-out when he used it to resolve the murder mystery at the heart of Twin Peaks, but, refined and revisited here and in the unpleasant Lost Highway, it becomes more disquieting.

So if the film suffers from a split personality, Lynch nearly manages to turn that into a virtue. In that respect, his audacity is breathtaking -- the main narrative twist both subverts and reinforces everything that came before it, negating the emotions on display just before amplifying them to overwhelming levels. Given that Lynch the feature-film director wields such transformative power over the work of Lynch the television director, Mulholland Dr. finally functions as a fascinating auto-critique. It’s true that this film fucks with its audience -- but it also fucks with itself.