Barry Levinson's "Avalon" is a rich, graceful work of lulling sentiment. Sprung from Levinson's memories of his grandfather and the immigrant culture he knew as a child, it is a love story. But in this case the love object is the past, and in the larger sense the American past as reflected in the eyes of the people who came here and encountered the country in its innocence as the realization of their dreams of freedom and enterprise.

"Avalon" is made with a master's confidence. Levinson, who with this movie completes the trilogy of Baltimore films that began with "Diner" and "Tin Men," has never worked with anything like the assurance he shows here. Perhaps the transforming element is his ability to tap into his love for the material. But Levinson never allows himself to be washed overboard with emotion. The picture begins on the Fourth of July in 1914 with the arrival of Sam Krichinsky (Michael Krauss), and the scene is abundantly, unapologetically nostalgic. So is the rest of the picture. But nostalgia is built into the characters. As they see it, the moment of perfection in America was marked by their arrival. Everything since has been desecration and decline, and Levinson is smart enough to make this an aspect of the film's comic and emotional texture.

Avalon, the Baltimore neighborhood where Sam and his brothers first lived, is the forever-amber symbol of that perfection. Gradually the other members of the clan arrive and, by joining the family paper-hanging business, prosper. Levinson lays out these scenes with a rapturous attention to detail. And what's evoked is not so much the mood of the time as the spirit of his characters' memories of it.

A few years after Sam's arrival he brings over his wife, Eva, and while some attention is given to these early years, the bulk of the film takes place during the boom after World War II, when their son, Jules, is grown and married and has a son of his own.

The film's point of view is split between Sam (who's played brilliantly as an older man by Armin Mueller-Stahl) and his grandson, Michael (Elijah Wood). But Levinson also presents a colorful ensemble of nephews, aunts and uncles. The Krichinskys are a tight-knit group who work, raise their families and celebrate holidays together. During their clan meetings they determine which charities they will contribute to, make plans to bring over other relatives, and bicker.

The bickering has the quality of ritual; the same complaints -- like Eva's bafflement over the celebration of Thanksgiving or Uncle Gabriel's (Lou Jacobi) grousing over being excluded from the cutting of the turkey -- are trotted out on every occasion. And their bantering has the same hilarious borscht-belt rhythms that Levinson wrote for his characters in "Diner" and "Tin Men." This table talk and family kvetching serves something other than a comic function; it reveals the origins of those routines.

These are funny people, and Levinson is at his best when he turns the picture over to them. But there's also a sonorousness to the emotions the filmmaker expresses as he traces the transitions in the family. At the root of this is his attachment to family tradition, to the manner in which business is conducted -- even if it's the business of cutting up the Thanksgiving turkey -- and his sense of place. One of the most poignant moments comes when Jules, who along with his cousin Izzy (Kevin Pollak) has grown increasingly successful in the retail appliance business, moves his family to the suburbs and he and Sam stand in the living room of their old house, recalling the things that happened there.

What Levinson is showing us is the birth of the suburban middle class and, by exploring Jules and Izzy's business expansions, the spawning grounds for middle-class anxieties as well. Still, Levinson isn't interested in mere sociology. He's interested in behavior, particularly the behavior of ordinary people, and he keeps the narrative centered in the details of family life.

Levinson has always assembled strong ensembles for his Baltimore films, and "Avalon" is no exception. In the bigger family scenes, he creates a feeling of intimate byplay between the actors. They spar and overlap neatly and, in the case of an exchange centering on the movie "Stagecoach," masterfully. The lead performances too are movingly expert. As the older Sam, Mueller-Stahl has a touch of dashing Old World poetry in him. He gives the movie its soulful plaintiveness. And he's just as effective in his scenes with Eva, who is played by Joan Plowright in a manner that suggests what Margaret Dumont might have been like if she'd turned cantankerously dotty.

There are good performances even in the smaller roles. I loved Pollak's wisecracking inflections as Izzy; also, Jacobi's ethnic spritzing as Uncle Gabriel. But perhaps the picture's best moments come from Aidan Quinn, as Jules, and Elizabeth Perkins, who plays his wife, Ann. Ann is fed up with having her mother-in-law constantly underfoot, correcting whatever she does and in general treating her like a dolt, and Perkins is riotous in the collection of shrugs and body twists she executes in place of telling her off. Ann isn't a complainer, but in bed one night with Jules she cuts loose, and her angry resentment is a comic tonic.

Quinn, on the other hand, probably has fewer comic lines than anyone else. He's the serious one, the worrier, and you can see how all the optimistic rhetoric he's digested over the years from his father has weighed him down. He always seems a little pinched, as if he's expecting a bill to come due (he usually is), and his performance anchors the movie and keeps it from flying off into empty schmaltz.

Levinson's hand does shake a little late in the film. Also, at times the film seems almost too polished and symmetrical; Levinson, in fact, may be trying too hard to get it all right and manages instead to leave everything a little too pat.

What this amounts to, though, is third act problems. He can't resolve his story, so he settles instead for a neatly wrapped package. But the gift inside the wrapping is a luxurious one. With "Avalon," Levinson reaches into his deepest self, and an artist can't be asked to do much more.

Avalon, at area theaters, is rated PG.