By Jonathan Carroll

Arbor House/Morrow. 217 pp. $15.95

Jonathan Carroll's novels refuse to fit into easy categories. Part horror, part fantasy, part mystery, part love story, they reel you in quickly and effortlessly. No artificial lures are used: Carroll creates compelling plots with three-dimensional characters, but he can also pour a bucket of water over your head just when you least expect it.

"The Land of Laughs," his acclaimed first novel, is a tour de force that starts with one of those notions that occurs to every child: going to visit the author of your favorite books. Sounds charming, right? But by the final pages, most readers are likely to be hiding under the bed.

His second book, "Voice of Our Shadow," told of a young man haunted by his role in his brother's accidental death and of a dead magician's transformation into an avenging lover. Both novels begin quietly and calmly in the mundane world, where they proceed to trap the reader in their tidy realism. Then the author launches his metaphysical fireworks.

Carroll's obsession is the interplay between reality and the fantastic. No writer since Shirley Jackson has so impressively worked this borderland, continually leaving the reader uncertain whether the psychological or the supernatural explanation of events is the correct one. Ambiguity, in Carroll's hands, becomes a fine art. Indeed, his latest novel "Bones of the Moon" suffers only from not being quite ambiguous enough.

Cullen James is a young woman who has everything she wants. She loves and is loved by her husband Danny; they have a beautiful baby, Mae; the future is full of pleasing possibilities. Cullen knows this, and is uneasy.

"I just want everything to stop right now and never never move again: like a picture you carry in your wallet," she says. "You know those? The kind people carry in their wallet to show you? Whoever it is, is always smiling and so happy. But you know they were always sad after that. Maybe five minutes or a day after the picture was taken, someone they loved died, or they lost their job ... and everything got screwed up."

Cullen gets screwed up. She begins dreaming of a mysterious, war-torn land called Rondua, which seems to have been designed by a young child's whims. Animals can talk and are as big as hot-air balloons; there's also a City of the Dead, bees the size of coffee cans, a flying horse, a Plain of Forgotten Machines, a pink sea with yellow waves, a circus where memories perform, a musical contraption called the Wind's Lips and many other marvels.

Too many, perhaps. At one point Cullen comments that "our dreams are like the messes children make in a kitchen when no one is around to yell at them. Ketchup, an egg or two, chocolate sauce -- all thrown in a blender and zipped around." Rondua comes across the same way, as Cullen and a strange boy named Pepsi go on a quest for the Bones of the Moon, which will stop the fighting and make this world whole again.

If Rondua is a little vague, New York City is expertly sketched in. Cullen's early life, her courtship of and marriage to her husband, their relationship to the Axe Boy (the nice young man who lives directly beneath them and who slaughters his mother and sister) all are so entertainingly recounted that the reader never bothers to wonder what the points of some of these episodes are.

Carroll's first two novels were so nimble, so dazzling that the reader relinquished them only with reluctance. In "Bones of the Moon," however, his hand is a little unsteady. There are references to Stanislaw Lem that seem a trifle affected, especially after you notice that Lem is providing a jacket blurb. A character in Rondua and one in Cullen's real world have the same name, for no apparent purpose. And, oddly for a storyteller who is usually so masterly, the ending is predictable.

"I like 'playing' with a reader," Carroll once told an interviewer. "Hell, isn't that what we're there for -- as readers -- to be surprised and baffled and shocked? Those guys who begin with 'It was a stormy night' give away everything too soon." Carroll doesn't give away too much too early here, but the increasing influence of Cullen's dreams on her waking life is less effective than it should be.

Yet if "Bones of the Moon" is not as perfect as his first two novels, it's still vastly superior to most contemporary fantasy. Rather than be content with using any of the traditional but tired werewolves, vampires or ghouls, Jonathan Carroll is working a richer and deeper vein -- the horror lurking on the shadowy edge of daily life.

The reviewer is a reporter for the Style Plus section of The Washington Post.