As a crowd of art fanciers looked on, today a 44-year-old artist turned this city's biggest liability into an asset. Garbage became art.

It was billed as a ballet for garbage barges, the first sound and light show ever held inside a garbage dump, the first garbage show held inside an art gallery, and a "cleansing ceremony" to wipe obscenities directed at garbagemen from the window of a SoHo gallery.

But for Mierle Laderman Ukeles, the official artist-in-residence of the New York City Department of Sanitation, it was the culmination of six years of work on the force, during which she shook hands with all of the men on their routes and collected anecdotes along the way about the plight of "the housekeepers of the city." In her first artwork she sheathed a garbage truck in mirrors, "so people could see who makes garbage." At approximately 2:30 this afternoon the second phase of her art piece came to life in the Marine Transfer Station.

A row of orange warning lights flashed on and off, and the ear-splitting crunch of grinding garbage filled the room. A row of garbage trucks and street-cleaning equipment lined the cavernous river-front station, identified by museum-style labels: "rear loading compacting refuse collection truck with graffiti," and "cubic yard Athey wagon used to transport refuse to landfill site on Staten Island called Fish Kills."

"My fleet is coming in," quipped Mayor Edward Koch, wearing a set of earplugs to muffle the sound of grinding gears and the long and short blasts of the tugboat out on the Hudson, as the crowd of downtown art lovers in T-shirts and blue jeans encircled the podium. "Only in New York could you have a sanitation department that becomes a work of art. I remember in the John Lindsay years we had happenings in Central Park. We thought that was elitist -- we have ours in the Department of Sanitation."

Ukeles, dressed in the official orange sanitation department T-shirt and a khaki vest pinned with buttons from labor organizations all over the world, kept her speech brief. "Thank you for coming," she said. "Welcome to the sanitation department. I think that the sanitation commissioner, Norman Steisel, is like a modern-day Medici. That he would use me as raw material is wonderful. The tug's calling us."

A pair of 500-foot-long barges glided gracefully from the river into the transfer station. It was intended to simulate what it is like when the garbage trucks line up along the railing of a transfer station to disgorge their contents onto barges. But they didn't today. This station, one of several along the river, has been closed for three years for repairs. That was the end of the ballet, but not of the event.

Everyone then moved downtown in a city bus with the words SUBWAY SHUTTLE flashing on and off to the Ronald Feldman Gallery in SoHo. There the street was roped off, and on the gallery walls were obscenities written in water-based paint: "WHY DO YOU MORONS WITH THE TRUCKS MAKE SO MUCH NOISE!" "SLIME PICKERS." "YOU GUYS ARE WORTH NOTHING."

Ukeles climbed the steps of the gallery in her black patent leather shoes and green chartreuse stockings and turned to address the crowd. "One day I heard a story I want to share with you," she said, brushing her red hair back from her face. "A man walked up to me and said, 'Mierle, I never thought you'd do it, but you have. Seventeen years ago we were picking up garbage in Brooklyn. It was hot. It was humid. We came to a break and sat down on the front porch of a lady. She opened the windows and said, 'Get away from me, you smelly garbagemen. I don't want you stinking up my steps.' For 17 years that has stuck in my throat. Today you cleared it away.'

"Today we are going to clear all the throats. Right here in front of this gallery we are going to stop naming garbagemen as bad, wrong. We are going to wipe it away."

Ronald Feldman, the gallery's director, grabbed a sponge and went to work washing away the word "Slimebag."

"I thought it would take me five months to complete my project," said Ukeles in a quiet moment, standing by her mirrored garbage truck. "It took me more than five years. I guess I am bad with arithmetic."

"The whole thing started when I was changing my baby's diaper back in the late '60s. I began to think about maintenance. I began to think about my life. There I was, an expressionistic artist with degrees in International Relations and African History from Barnard and children and a husband. And yet I was out of touch with the world. I went to the sanitation department and made a proposal -- I would meet all the sanitation men and turn their work into something dignified."

Over the course of her first year she shook hands with all 7,000 workers and witnessed some 8 million tons of garbage being ground up and disposed of. She mirrored the truck that is parked here today outside the gallery. She cleaned the floor of a New York museum. And she won some loyal adherents among the all-male force.

Doug Borkowski, eyeing the crowd of SoHo art fanciers in Christo T-shirts and one that said "Taste=Waste," said, "Sanitation men are not like a bunch of gorillas. Some of us have college degrees. Mierle has made us feel good about ourselves. If that's what art is, it's fine by me."

"Maintenance," said New York artist Bonnie Lucas, "is the traditional feminist role. That's what Mierle is all about. And I think she is a breath of fresh air in this effete art world."