EUFAULA, ALA. -- Anybody who knows the small-town South knows Wal-Mart. It's the discount chain that dared to go where few chains had gone before, into towns of 6,000 or 7,000 isolated souls, predominantly in the South, bringing variety, bargains and that two-faced creature called progress.

Whatever the town, the Wal-Mart is almost always the biggest building around, a one-story behemoth sprawled down there off the highway near the Hardee's and the video store. It's the only place for miles where the parking lot is full.

''We've got a Wal-Mart, you know,'' civic leaders boast, as if it signals the beginning of an industrial boom.

''Been to the Wal-Mart yet?'' townspeople ask proudly, as if it were Disney World.

''Yep, downtown's about dead,'' the downtown merchants say sadly, as if they were talking about the old family dog. ''It's the Wal-Mart that did it.''

Blaming Wal-Mart for single-handedly killing small-town downtowns is as unfair and simplistic as blaming suburban malls for killing inner cities. But around the country, there is a growing concern that when Wal-Mart comes to small towns, downtowns die, and with them a way of life.

Take Leland, Miss., for example.

''We are a town of 6,500 where a man no longer has the opportunity to buy a pair of underwear or a decent pair of socks,'' growled Mac Gordon, editor of the Leland Progress. He blames the underwear shortage on two Wal-Marts, one eight miles away in Greenville and another 15 miles away in Indianola.

''Wal-Marts have changed the small-town South,'' said Charles Wilson, associate professor of history and Southern studies at the University of Mississippi. ''They're almost always located in the strip shopping centers that have grown up on the outskirts of town. They're not identified with the old town square, which in many cases is dying. Wal-Marts are a symbol of that change, and in very tangible ways have promoted it.''

As Wal-Mart Stores Inc. continues its relentless drive to overtake Sears, Roebuck & Co. and K mart Corp. as the nation's largest retailer, pushing north and west into tiny towns such as Price, Utah, and Spearfish, S.D., many more towns are worrying about the ways Wal-Marts change the areas they enter.

It's a worry so great, in fact, that it has made a Wal-Mart guru out of a mild-mannered Iowa State University economist named Kenneth Stone.

For the past four years, Stone has studied Wal-Mart's effects on small Iowa towns. He contends that while some businesses prosper when Wal-Mart sets up shop, many more suffer or even close. Particularly hurt are businesses in towns surrounding the Wal-Mart town, such as Leland.

''My basic principle is this,'' Stone said. ''When Wal-Mart comes into a small town, they're going to take a big hunk out of the retail pie, and the size of the retail pie is virtually fixed. Somebody loses.''

Stone is now a popular speaker on the small-town circuit, lecturing merchants on how to survive the Wal-Mart invasion.

A few weeks ago, he spoke to shopkeepers in Eufaula, a shady, antebellum town of 12,000 in southeastern Alabama. A Wal-Mart is scheduled to open there this fall just behind the McDonald's on U.S. Highway 431, a few blocks from the modestly prosperous old brick storefronts in downtown.

To compete with Wal-Mart, Stone warned the merchants, they will have to provide better service and smarter pricing. And they certainly will have to reconsider the outdated tradition of closing on Sundays, weekdays at 5 p.m. and every Wednesday afternoon, primarily so everybody can go fishing.

''Merchants here ought to be worried, more worried than they are,'' said Donna White, a salesclerk at Magnolia Crow, a gift shop and reputedly the only place for 50 miles where it is possible to buy a hardback book. ''People are going to have to change. Wal-Mart is not going to close every Wednesday afternoon.''

In the South, Wal-Mart is more than just a store. Its founder, Sam Walton, is a hero, a one-time dime store owner who, despite being one of the richest men in America, still lives modestly in Bentonville, Ark., where Wal-Mart has its headquarters. The store's grand openings have been hailed as Southern theater. With its miles of aisles and merchandise stacked to the rafters, a Wal-Mart is as full of diversions as a theme park.

''There's not a great deal of entertainment in town,'' said Allen Culpepper, editor of the twice-weekly Eufaula Tribune. ''One of the things people do is shop. On Sunday afternoon, people go to the Wal-Mart for fun.''

In Eufaula, that has meant driving 50 miles south to Dothan or just as far north to Columbus, Ga.

Wal-Mart also provides benefits. It brings sales tax revenue and inexpensive goods to town, notable attractions in the poor, rural areas in which it tends to locate. It also provides hope.

''A lot of towns see Wal-Mart coming in as a sign of a big boom about to happen,'' said Stone. ''They think, if Wal-Mart feels good enough about our town to put a store in, we must have a lot going on.''

It's a testament to Wal-Mart's reach and power that Stone isn't the only Wal-Mart guru around. Steve Taylor, the owner of two clothing stores in the neighboring Nebraska towns of Scottsbluff and Gering, has become a popular speaker in Wal-Mart's new Western territory, lecturing on how he has survived the local Wal-Mart while storefronts around him emptied out.

''In this part of the country, Wal-Marts are a big deal,'' Taylor said. ''They put in huge stores, 70-, 80-, 90,000 {square} feet, stores bigger than we've ever seen before. It's an awesome sight.''

He grants Wal-Mart a certain grudging respect. ''The real problem is that they're so good at what they do,'' he said. But, he added, ''They do such tremendous sales volume and their money leaves town virtually immediately. That's money that may have circulated among several businesses in town, but now, once it's gone, it's gone.''

No one is deluded enough to think that Wal-Mart will stop its inexorable march into the nation's small towns. Consumers love Wal-Mart, and in towns deprived of variety and convenience, nostalgia for old downtowns feels like a luxury.

Even so, in towns like Eufaula, there are those who wait for the Wal-Mart as if they are waiting for a hurricane, wondering what's about to be lost.

''I am very concerned about the downtown,'' said editor Culpepper. ''It's one of the few that's breathing at all. Somebody the other day said we need a mall in Eufaula. I said we've got one, it's called downtown. All of these big cities are spending millions to create exactly what we have here.''