At the beginning of Spirited Away, a dazzling, surreal picture-book head trip from Japanese animation visionary Hayao Miyazaki, day slips so quietly into night that 10-year old Chihiro doesn't even notice.

It's one of those twilight moments when you slide from consciousness to dreams without a blink. Chihiro was riding with her family to a new house and her dad lost his way. They came to a statue of a troll in the middle of a road and climbed out. That's when Chihiro saw the long dark hole beckoning her. A tunnel, to be specific.

Keep Alice in Wonderland in mind. It gets stranger. The family finds a castle in a field of grass and assumes it's an abandoned theme park. It's not. Within minutes, the parents are turned into pigs and Chihiro is forced to work at a bathhouse run by chain-smoking toads who provide rest to the spirits.

If the children's literature section of your neighborhood bookstore was shuffled up and animated, with painterly sophistication and a Grimm eye for the bizarre, The Phantom Tollbooth and The Wizard of Oz landing on top, the result might look like Spirited Away. It's the smart family picture you always complain isn't being made.

Yet I fear I've already lost some of you. It's animated, it's two hours long, and it's Japanese, albeit dubbed flawlessly into English. Not interested? Oh boy. How about this? It shared the grand prize this year at the Berlin Film Festival. Or this? Spirited Away is the biggest box office hit in Japanese history - bigger than Titanic. You want references?

Spirited Away is being distributed and presented in this country by no less than Walt Disney Pictures, which seems to think it knows a thing or two about what Americans like. John Lasseter (creator of Toy Story), along with Donald Ernest (producer of Aladdin) and Kirk Wise (director of Beauty and the Beast), oversaw the English translation. These people would not steer you to something bad.

Weird, yes.

Spirited Away is a mesmerizing mingling of the grotesque and the sublime. Once in the bathhouse, Chihiro is forced to serve a bobble-headed witch, Yubaba. When she isn't caring for a Bigfoot-size infant, Yubaba is followed around by three bouncing heads. Elsewhere, at her command are a host of chatty frogs and viscous origami and lashing dragons and sulking blobs and, my favorite, a giant radish spirit.

Spirited Away is unquestionably the best animated feature since Brad Bird's The Iron Giant - itself something of a Miyazaki favorite, and it's not hard to see why. Neither film strokes the audience with cheap sentiment, or worse, quickly dates itself by inserting a last-minute pop song to juice up sales of the soundtrack CD. (How antique will Smash Mouth sound in Shrek after 20 years?) Miyazaki (pronounced ME-ya-zah-key) makes animated films that are at once universal and very Japanese; he's never jokey or glib. Also notice how he doesn't start strong then lag into the predictable chase-and-sob climax of many animated films.

Aside from a mundane opening and closing - which are more like rests in a grand symphony - the surprises keep coming, piling up, all in the service of the characters and the plot. Indeed, the images become so casually breathtaking that some moviegoers might start to feel something similar to museum fatigue - that exhausted exhilaration that comes from facing your 32nd Jackson Pollock or Degas:

The tranquil sight of a steam train chugging along the ocean surface, on tracks hidden beneath the waves, replaces the image of an old crone curling her petticoat around herself and flying off into the horizon, which in turn replaces an unforgettable sequence in which a riverboat dispatches dozens of spirits and gods, each cloaked in a colorful sheet and creepy Eyes Wide Shut mask, looking like Peanuts characters headed to a rave.

Miyazaki risks overwhelming you, and then takes an even bolder step: He doesn't coddle kids or reassure parents, not with an obvious message, not with a plot headed assuredly for a happy ending. Chihiro tumbles so far down the rabbit hole, you wonder how it will turn out.

The story has emotional depth to match its magical surface, too; slipped silently into the typical children's tale nuttiness are breaks for silence and disarming moments of patience. At one point we watch, step by step, Chihiro navigate a perilously steep staircase. If the film is a little too scary for very young children - those age 6 and younger, say, may be frightened - Miyazaki does eventually get gushy.

But Chihiro earns her tears, and Miyazaki is too generous not to deliver. Spirited Away may sound like too much for some people, and certainly for some kids, but the thing to remember is only a Miyazaki film looks like a Miyazaki film.

He is one of Japan's finest filmmakers, a contemporary master as evocative as Martin Scorsese, and as entertaining as Spielberg. His medium just happens to be animation. His spiritual heir is really Disney himself. And like Disney's finest classics, Miyazaki doesn't make movies to satisfy any specific demographic. Adults, children - for years after seeing Spirited Away you could close your eyes and float away on its images.

It's a shrewd policy: Kids get older. Dreams remain.

First Published March 28, 2003, 12:33 p.m.