Designer Carolina Herrera, who was in town last week as guest of honor at the Ambassadors Ball, recalled the first party dress she ever owned. "I wanted something black, because I wanted to be a vamp," she says with a giggle. "The white point d'esprit dress my mother insisted on was just the proper thing for a 15-year-old."

Apparently her sense of what to wear has improved dramatically. Herrera, 43, who has been designing clothes for just over a year, creates dresses and suits for some of the most savvy, fashionable women around, among them her social chums Diana Vreeland, Bianca Jagger, Princess Elizabeth of Yugoslavia, Pat Lawford and Pat Buckley. Most of her friends, including Nancy Reagan pal Jerome Zipkin, were in the front row when she showed her current collection at the New York public library on Fifth Avenue last May.

"It is a problem having friends as customers," she says. "If I start to sell wholesale to friends, I won't need the stores. And they won't need me." Several guests at the Ambassadors Ball were wearing her gowns. The next day, there was a fashion show of her designs (which sell at Saks Fifth Avenue for $1,000 and up) for guests of the ball.

Herrera was born in Caracas, and grew up surrounded by beautiful clothes. Her grandmother, Maria Christina Passios de Nino, took her when she was 13 to see the Balenciaga collection in Paris and introduced her to the designer. Later, Herrera herself collected designer label clothes, particularly Valentino, Yves Saint Laurent, Bill Blass and Mary McFadden. She has been on the Best Dressed List so frequently she's now in the Best Dressed Hall of Fame.

But when she couldn't find what she wanted off the rack in Caracas, she would work with dressmakers, making tiny sketches not more than two inches high, but always with every seam, pocket and button in perfect detail. "I don't see well so I can't imagine why my sketches are so small," she says. Sketches she made for friends who asked for her help were sometimes so tiny that her friends looked at them with a magnifying glass, she says, laughing.

Until she started her own business, Herrera had held only one job, assisting with public relations at the Emilio Pucci boutique in Caracas. It was by chance that she met a financial backer who became her partner in business. "I wasn't looking," says the designer, though she had been prodded by a friend in the menswear business in Caracas to "do something serious." She had met Armando de Arnas, the publisher of several fashion magazines in South America, shortly after his Latin American version of Harper's Bazaar featured her in the magazine. "I heard from a friend that he was looking for something different to do," says Herrera. She decided on the spur of the moment to ask de Arnas to help her start in business and he agreed. De Arnas usually sits in the front row of her shows, but has no input in the designs.

Herrera is quick to admit that ideas for her dresses sometimes come from the designs she and others once had in their closets. Occasionally she'll refresh her recollection of them with a visit to the Costume Institute at the Metropolitan Museum of Art.

The big sleeves on many of the gowns from her first collection a year ago were from 15th- and 16th-century paintings, she says. There were so many big sleeves that Women's Wear Daily dubbed her "Our Lady of the Sleeves." But women were reluctant at first to try them on. Now they are asking for them. "Finally they understand that broad shoulders make the waist look slimmer," she says.

Most of her evening dresses are as much "grand exit" as "grand entrance" designs with asymmetrically cut-out backs. "Today it is sexier to wear something revealing in the back than the front."

She also designs the shoes and the jewelry shown with her clothes. "I have a thing about shoes," she says, fondling the two-tone styles she designed to go with her suits. "If you don't have the perfect shoes, you really don't have a complete look."

Herrera, who has four daughters, likes to tell them what to wear. She can still put her youngest, who is 9, in smocked dresses, button shoes and velvet-collared coats. Her 19-year-old still asks her opinion on how she looks. "When I don't like something I tell her she looks like a clown. She doesn't like it much but I have to be honest."

Honest, but not unrealistic. When she was in Washington she was wearing a beige linen jacket, gray trousers and lizard sandals. "I know you are not supposed to wear linen after Sept. 1. But when it is hot as hell, what can you do? Why should you die of the heat?"