Folger Shakespeare Library director O. B. Hardison Jr. was spotted walking through his new reading room the other day with a contented-cat smile on his face, and no wonder. About 10 years ago he handed architects a basketful of problems. They solved them one by one with a low-key sort of skill that is as rare as it is welcome.

Like Paul Cret, the architect who designed the Folger Shakespeare Library more than a half century ago, the Washington architectural firm of Hartman/Cox confronted a ticklish dilemma.

Cret's problem was to accommodate the wishes of the donor, Henry Clay Folger, who wanted the building to evoke the age of Shakespeare outside and in. Fortunately, the architect was able to persuade the client that half timbers and angled eaves would not sit too well in a neighborhood of low, 19th-century brick houses scarcely two blocks from the Capitol and its white neo-classical outbuildings.

The result was the delicate essay in stripped classicism, a combination of white Georgia marble with Art Deco details in aluminum, that sits very well indeed on East Capitol Street. Inside, Folger had his way with huge high halls and intimate meeting rooms replete with wood paneling, stone carving, tracery windows, Tudor arches and myriad details echoing Elizabethan England.

The Hartman/Cox team--Warren Cox, partner in charge, with Mario Boiardi and Andrew Stevenson--used this stylistic schizophrenia as a starting point to play a wonderfully sophisticated architectural game. The solutions differ not only outside and in but also from room to room and, at times, from place to place in the same room.

To begin with, the institution's needs were complicated. The $8 million program called for a thorough reconditioning of the original structure, including rearranging office spaces for greater efficiency and installing contemporary climate control equipment without damaging the warm, olde-style presence of the place. Stack space for books had to be greatly expanded and an added reading room was in desperate demand.

Besides all this, there were odds and ends peculiar to the institution, such as the request for a "Treasure Room" just outside the great vault doors to the Folger's extraordinary collection of rare books. As is well known, the library owns the world's largest collection of the 1623 First Folio edition of Shakespeare's plays--79 out of some 240 known extant copies. It also owns 208 quarto editions of the master's plays and poems, 16,000 titles printed in England or in English before 1641, 70 letters and documents signed by Queen Elizabeth I, and on and on.

The Folger, in short, is a place with a formidable aura that is both scholarly and architectural. The Hartman/Cox renovations and additions, accomplished in phases over the past decade and completed late last year, are remarkably sensitive to these challenging circumstances.

The aesthetic high point of the new work is the new reading room, a worthy addition to the long list of distinguished interior spaces in the city. Echoing the dimensions of the old reading room, the new space is quite different in character: a long light-filled rectangle whose white-painted barrel-vaulted ceiling contrasts with the dark wooden trusses of the original.

Much of the soft glow of the new room results from natural light that flows through a broad central opening in the vaulted ceiling and around its edges. The secret here is that the barrel vault is not structural; it is a nearly weightless but thoroughly impressive thing suspended from steel girders atop a glassed-in roof.

In part, the contrast between old and new works so well because of skillful attention paid to transitions and to details. To pass from the one room to the other is not simply to walk through an open door; it is to experience an open-closed-open sequence that yields a sense of pleasant surprise. Similarly, the plasterwork in the new room, mimicking the rusticated stonework one finds in the hallways of the original building, is beautifully placed and proportioned. Progressions from big to little and back again--as from fluted wooden entrance columns to "column" table legs to "column" chair legs--are felicitously handled everywhere.

"We were constantly reshufflng the deck," Cox explains. "It was like doing 20 different house remodellings within the same building." The Treasure Room is a notable example of the process. Designed to display a few of the library's rare volumes and manuscripts, it is a warm, intimate space paneled in the same Appalachian oak used throughout the original building. There is an American touch to the place. Like some paneling at Mount Vernon, the woodwork imitates a rusticated stone pattern. Ingenious touches like this can be seen throughout the building in doors, stairwells, partitions, desks and cabinets for mail.

Most of the new construction is not visible from outside the building. The first phase of the project consisted of burrowing two new levels for book storage underneath and behind the existing structure. When this was completed and all the books were moved, the careful renovation of the original building began. The new reading room is the tip of iceberg, and the last thing to be done.

Structural necessity, the need for light and Cret's architectural style determined the exterior form of the addition, which had to be fitted between the wings at the rear of the original building.

Ordinarily a back-alley addition doesn't need quite so much care, but the Folger alley, shared with the 1938 addition to the Library of Congress, is much wider than most. Consequently, it is highly visible from both Second and Third streets SE. The problem was complicated because the new structure had to be hung from heavy steel beams.

Cret practiced a now-you-see-it, now-you-don't sort of classicism on his main fac,ade, especially in the paradoxical way the fluted piers between the two-story windows make a sort of columnless colonnade. Hartman/Cox did something of the same thing at the back of the building, allowing the structural steel to stand exposed, but sheathing the vertical struts with flat shafts of fluted marble set perpendicular to the plane of the building. The combination of marble and steel with plain pipe-rack window work is not wholly satisfying. But basically it is an ingenious, and quite modest, trick that cleverly accommodates the oblique angle from which most pedestrians will see the addition.

Appropriately, though, it is when you step inside that the knowing modesty and deft touch of the architects make themselves felt.