Grace Paley hardly exists west of the Hudson or east of Fifth Avenue. Her short stories are a kind of New York chamber music in which the instruments are the voices of the city -- more specifically Greenwich Village, more specifically 11th Street between Sixth and Seventh.

She works slowly, noting the flattened consonants and the political yarns heard on the benches of Washington Square Park, the eternal kvetching in the coffee shops of Bank Street, the playground yelps on West Fourth, the spoken critiques of Ronald Firbank's novels on Christopher Street, the sirens approaching St. Vincent's Hospital, the leathery weirdness blooming around the Ramrod, the good smell of bread rising in Zito's and the pizza cooling in Ray's.

Paley is attuned to all of it. Sometimes she will do her best observing while handing out protest literature on the corner of 11th and Sixth. She is always gathering seeds. And once in a very great while, the voices and smells, the emotional strength and overheard conversation will flower into lines, then literature. Her new book of stories, "Later the Same Day," took more than a decade to cultivate.

"I'm always making little notes, false starts, beginnings," Paley says, curling her doughy self into an old rope chair. "I wrote poetry for years before I ever wrote a story. I still work like a poet. Real slow."

Her living room is filled with rays of sunlight that make a crazy corona of her wild gray hair. She has the friendly aspect of a TV grandmom. With all her notes and effluvia scattered around her, she says, "I can't even keep a journal. I'm always losing the book. I have no discipline." Certainly not the steely discipline of a Joyce Carol Oates or an Anthony Burgess, the sort of literary industry that produces bulging books in and for all seasons.

"I can't work like that and never have," Paley says. "There have been long periods of my life when I was bringing up my two kids and playing with them at the playground or working on political things and the stories had to wait. I've let all that happen. No regrets. The stories come when they come."

At the age of 62, Grace Paley has published just three collections of stories, a total of 45 tales. But nearly all of them are remarkable for their clarity, their sense of place, their sympathies. As Philip Roth has said, Paley's stories display "an understanding of loneliness, lust, selfishness, and fatigue that is splendidly comic and unladylike."

She seems to be of a type, a New York type, ready for lampooning. The city is filled with so many people like Grace Paley, would-be writers who wear their concerns like sandwich boards, who struggle for a quiet eccentricity in a city where difference is merely a given. But Paley is a genuine article, unpretentious, funny and wise. In the words of her neighbor and colleague in fiction, Donald Barthelme, she is a "wonderful writer and troublemaker."

Paley's second-floor living room is vintage Village. Bookshelves crammed with Babel and Chekhov and Marx, records piled into a Hellman's mayonnaise box, a sad rag rug, artifacts of politics, woolly pillows strewn on the floor, three empty light sockets in the ceiling. The lived-in look.

"I've been here almost forever," she says. Take "here" to mean New York, and that is true. Paley's background is richer than just the block. Her parents, Isaac Goodside and Manya Ridnyik, left Russia around 1905 and settled in New York, first on the Lower East Side, then in the Bronx. When they were young in Russia they had been Social Democrats opposed to the czar. Goodside had been exiled to Siberia and Ridnyik to Germany. In New York, Goodside helped teach himself English by reading Dickens. He became a doctor. Paley's mother took care of the house -- Paley herself often escapes to sweeping and washing when her stories won't come unstuck.

"When I was little I loved to listen to my parents' stories, all the talk that went on," she says. "I loved to listen and soon I loved to talk and tell."

She studied at Hunter College and New York University but not long enough for a degree. She married a movie cameraman, Jess Paley, when she was 19 and had two children with him, Nora and Dan, now 35 and 33. Her real university was an immersion in poetry. She studied writing with W.H. Auden at the New School for Social Research in the '40s.

"I really went to school on poetry," she says. "I learned whatever I know about language and craft from writing poems. I worked at it for years and years but I was never a great poet. I didn't know what to do about it, except keep at it. When I was in my early thirties and I wasn't doing my work I was worried because what I was most interested in were the lives of the women around me and our various relationships. I just couldn't write about that in poems, and so I started trying a little prose. That was the real breakthrough."

Her first story, "Goodbye and Good Luck" is the work of a natural. It's about a young woman in love with a great actor of the Yiddish theater. The story, and Paley's career, began in perfect pitch: "I was popular in certain circles, says Aunt Rose. I wasn't no thinner then, only more stationary in the flesh."

Only two of the stories in her first collection, "The Little Disturbances of Man," appeared before the book came out in 1959. "And the magazine that took them," Paley says, "was Accent, a little journal in Urbana, Illinois. The way the book got published was that I had the nerve to show them to Ken McCormick, an editor at Doubleday who is the father of one of my children's friends. He saw three of them and said, 'Write seven more and you'll have a book.' "

Short story collections rarely sell many copies and for years Paley's publishers goaded her to write a novel. She tried. All it did was delay her second collection of stories, "Enormous Changes at the Last Minute," which did not come out until 1974.

"I was dumb to try," she says. "I had a lot of pages but it just wasn't any good. Thank God I was smart enough to throw them out. I didn't stay away from the novel. It stayed away from me. It probably has something to do with how I've chosen to use my time in this world. I've allowed all the distractions."

Life -- political and personal -- interrupted the writing for long stretches of time. She raised her children and she has been an activist for years, working against nuclear power, the war in Vietnam, U.S. involvement in Central America, and for various feminist causes. She frequently reads her work at political forums in the city and beyond. Yet politics have not bludgeoned her art. Her stories are often political but free of the sort of agit-prop fury that turns words to wood.

When "Enormous Changes at the Last Minute" finally was published, it attracted what the industry likes to call a "cult" audience. Which means small and devoted. The cult must be growing. Last week a film written by John Sayles and based on three stories in the collection opened at the Film Forum in New York.

The short story is enjoying a renaissance in American literature lately and Paley's publishers are hoping that "Later the Same Day" will attract a wide audience. The book has won terrific reviews in Time, Newsweek and The New York Times. Not that the work now is any more -- or less -- commercial. At their best the stories are still direct, swift and vibrant. The characters have aged along with Paley, and sometimes the voice of the book is like a wise litany. At times she picks up the Irish voices in the air, sometimes the black or Chinese. Sometimes the voice sounds much like her own, as it does here at the start of "Listening":

I had just come up from the church basement with an armful of leaflets. Once, maybe only twenty-five, thirty years ago, young women and men bowled in that basement, played Ping-Pong there, drank hot chocolate, and wondered how in God's separating world they could ever get to know each other.

Paley makes her living by teaching at Sarah Lawrence and City College. She is divorced from Jess Paley and she and her second husband, architect and writer Robert Nichols, divide their time between the apartment in New York and a simple cabin in Thetford, Vt. They are apart for months at a time, with Paley in the city and Nichols in the country.

"I can't stay away from the block too long," she says.

Nor can she stay away from her background, her Jewishness. She is roughly the same age as those Jewish-American fiction writers -- Roth, Saul Bellow, Bernard Malamud -- who have described the experience of second-generation immigrants. Paley keeps her distance from them.

"I'm a woman and that makes a big difference. It separates me a lot from Bellow and Roth and all those guys. There's such distortion in their writing sometimes, the kind of stuff that gives men a bad name. It really louses them up. I think there's a lot of contempt for their fathers coming out and it doesn't do the books, or them, a lot of good. I'm delighted to be a woman."

"Faith" has been a frequent character in Paley's stories, an alter ego who first appeared in "The Used-Boy Raisers" in the first book. Faith resurfaces in "Faith in the Afternoon," "Faith in a Tree" and "The Long Distance Runner" and now is heard from in "Dreamer in a Dead Language" and "The Expensive Moment," two of the strongest stories in "Later the Same Day."

Faith, like Paley, is now "at that lively time of life, which is so full of standing up and lying down," a feisty period in which all her experience and thinking has come to an extraordinary maturity.

"Faith is the one who does the most work for me," Paley says. "I don't think I'll ever kill her off. But I can't ever say what's ahead for my stories. I don't have any plots or plans. I'm glad to have written what I've written and I'm at a point in life where I feel a little smarter and more experienced and ready to write the best I can."

With that, Grace Paley returns to one of her welcome distractions. As she does every Saturday afternoon, she takes her place on the corner of Sixth and 11th near Ray's Pizza and Poppy's Deli, handing out leaflets, chatting with passers-by and, quite possibly, finding seeds for stories.