LOS ALTOS HILLS, CALIF. -- At 78, Wallace Stegner, novelist, teacher, historian, man of letters, is not about to start fooling around with a word processor. In the corner of the study in his Los Altos Hills home stands the current tool of his trade, a massive white Olympia typewriter that has never tasted electricity. He keeps another old manual in another corner, just in case.

Stegner is a morning writer. His study -- what a character in his latest novel would call his "think house" -- is a jumble of books.

There are a couple of filing cabinets, a desk, a typewriter table at right angles to the desk, a wood-burning stove. The room smells pleasantly of smoke, books and the cigars Stegner occasionally smokes before settling down to his work.

"I used to call this 'creative disorder,' " says Stegner, looking around. "Now it's just disorder." In fact, the room is surprisingly tidy. No one who had ever seen how newspaper people keep their desks could call Stegner's messy.

"I have terrible work habits. I can't let a page alone until I get it the way I want it. I may rewrite that 15 times until it's a 'first draft.' And then I go on ... I do a lot of rewriting. It doesn't go very fast. But once I've got a chapter going, I kind of sandpaper the edges a little -- it sets like concrete and then it's either use it or throw it away."

At the back of the study, down a step or two through a low door, is a kind of closet. It contains another wall of books, many of them Stegner's own works in translation. He pulls down an anthology of American short stories; his name is on the spine so he assumes it contains one of his pieces, but since the book is in Polish, he isn't entirely sure.

In "The Spectator Bird," Stegner's 1976 novel, his grumpy hero, Joe Alston, speaks of going down to his study. Stegner's is separated from the main house by the width of the carport. But in many other respects, Joe and Ruth Alston's house is Wallace and Mary Stegner's house -- the same hilltop, the same live oak tree, the same clogged culverts. Ten minutes from Stanford, half an hour from San Francisco.

"As you can see, it's kind of old and shabby," he says of his house. "We built it 40 years ago. I suppose its fate is, when we die, someone will buy the lot and build some three-story Tudor palace. {But} we have found it exactly the right size for us ... It's been a very good house to live in."

Over the years, the Stegners have sold off parts of their original eight-plus acres. Once they kept horses and grew barley and other fodder crops. Now there's a white Chrysler New Yorker in the carport, and next to it a gray four-door Accord.

Almost from the beginning, Stegner has feared for the neighborhood. The heroine of his 1961 novel, "A Shooting Star," grouses about the "neon and stucco cheapness" of El Camino Real, and nothing that has happened in the intervening 26 years has changed the author's opinion.

"I always did think El Camino was the ugliest street in the world," he says. "I always have had a wistful hope that we could live on the earth without destroying it. Even enhance it ... Yeah, I'm not very pleased with what has happened."

Stegner's deck -- part brick, part wood -- surrounds a vast live oak tree whose highest branches barely came to the rooftop back in 1948. Today the tree helps screen the hillsides that are increasingly pocked with houses. Stegner points to one across the valley. "Looks like the Cha~teau de Blois," he comments.

"Not very much of it is what I would think the country calls for ... the terrain, the physical vulnerability of a country with fierce storms."

"Beyond the esthetics of what kind of house you like" is the question of how big a house you can build in proportion to the amount of land you have. The Stegners put a 2,000-square-foot, two-bedroom house on eight acres. But "a lot of these houses around here are six, eight, 12,000 square feet. They'd look fine on a 50-acre plot surrounded by oaks. But here, gouged into the hills ... " They block percolation channels, alter flood paths. "It's rudimentary."

Stegner, who has fought Los Altos Hills over these issues, says town officials, unable to be flexible in regard to building rules, "try to put a template on the whole town." One of his arguments was that houses should be built in clusters, surrounded by commons. He might have been preaching communism, for all the interest he found in that idea.

"We could have had reasonable development {with} three- to five-acre lots," he says. "That would make it a rich man's community and I couldn't afford to live in it, but I'd go live in Mountain View happily."

Or Vermont. The Stegners, married 53 years ago, bought an old farm near Greensboro, Vt., not long after their marriage. For years it sat empty while the neighbors took what they wanted and the porcupines became squatters.

Then one summer Stegner was dismantling part of the old farmhouse to extract a beam needed by a friend, and when he was done, "there sat the frame -- just as square as when they put it up in the 1860s." It was a house after the Stegners' own hearts, so they moved it nearer to Greensboro and rebuilt it with a 25-foot cathedral ceiling.

The Stegners -- she is 76 -- spend summers there, on a pond not unlike the "Battell Pond" he created for "Crossing to Safety," his most recent novel. "It's a very peaceful kind of place. The sense of propriety of what is reasonable to do with the land is a little bit better developed than it is out here. The climate, on the other hand ..."

Wallace Stegner won the Pulitzer Prize for his 1971 novel, "Angle of Repose." "The Spectator Bird" (1976) won the National Book Award. "Crossing to Safety" is one of five nominees for the National Book Critics Circle's 1987 fiction prize.

He has published works of history ("Beyond the Hundredth Meridian," about explorer John Wesley Powell; "The Gathering of Zion," about the Mormon Trail) and biography ("The Uneasy Chair," a life of Bernard DeVoto, whose letters Stegner also edited for publication). In the Stegner oeuvre are memoirs and collections of essays.

Nevertheless, he recalls, "I never started out to be a writer at all ... None of my family were educated people or people with any vision of what the world did provide in the way of opportunity. I had a pretty good job, I thought, selling rugs and linoleum in Salt Lake City."

With an undergraduate degree from the University of Utah, he was offered a fellowship in psychology. But the English department at Utah rallied around Stegner and found him a writing fellowship at the University of Iowa. He earned a master's degree with some short stories, and a doctorate with a literary study of Clarence Dutton, the pioneer geologist, and Dutton's book, "Tertiary History of the Grand Canyon."

He taught at Utah, the University of Wisconsin and Harvard before joining the Stanford University faculty in 1945. He helped create Stanford's creative writing program and directed it until his retirement 15 years ago.

Although he continued to write while teaching, at one point he did not produce a novel for more than a decade. "I was teaching and doing other things," he says. "But it was partially that I got disgusted with writing novels. I wondered if anybody out there was reading them."

He broke his novelistic silence in 1961 with "A Shooting Star," a book he says is "not one I value. I was walking a thin line all the time, in danger of falling off into soap opera."

When he retired from Stanford, he had just finished "Angle of Repose," and there were other books he wanted to write. "I don't really regret the long time I spent teaching ... To teach and write is good for you.

"But it's stultifying" -- it can turn you into someone who does nothing but work. "Maybe," says Stegner, "I might have written better if I'd quit at 53."

Since "Crossing to Safety," published early this year, Stegner has been cleaning up a couple of essays, but has no major project in hand, no new novel. A novel, for Stegner, is a three- or four-year project. "If one comes up, I'll write it, but I'm not hunting," he says.