Director Michael Russotto clearly has an instinct for Shakespeare. He did a smart "Richard III" last season and now, in a Washington Shakespeare Company-Actors' Theatre of Washington co-production, he's taken the extremely difficult "Measure for Measure" and made of it an enjoyable, sometimes touching and--amazingly--funny evening.

Arguably the most problematic of Shakespeare's so-called "problem plays," "Measure for Measure" recounts how the Duke of Vienna (John Emmert), pretending to travel abroad, instead disguises himself to wander among his subjects--as well as to watch how his appointed deputy, Angelo (Christopher Marino), will govern in his place.

A fierce moralist, Angelo enforces a usually ignored law barring sex out of wedlock, putting poor Claudio (George Grant) in prison under sentence of death. Hearing of this, Claudio's sister Isabella (Taunya L. Martin), a novitiate, goes to Angelo to plead for her brother's life. Smitten with her innocence and virtue, Angelo pledges to free Claudio if Isabella sleeps with him. She refuses.

Modern audiences have a terrible time with this play. Admittedly, our sexual mores are more liberal, but even considering the more stringent practices of the 16th century, Isabella's valuing her chastity over her brother's life seems coldblooded. In a scene with him, she explains that she'd give her life for his, but she will not give her soul. (Since he's a man, though he must die for his transgression, his soul is not, apparently, threatened.) You can see her point without finding her remotely sympathetic.

The play is usually directed as Isabella's story, with the wise duke pulling unseen strings to bring her a happy ending. Russotto--in one of those ideas that seem absurdly obvious except that if it's so obvious how come no one ever thought of it before?--places the duke at the center of the drama. This simple move brilliantly reconfigures the play. Far from being powerful and all-knowing, the duke is, in Emmert's lovely performance, a shy, unworldly man whose journey outside his palace is a self-imposed act of education.

Aside from resetting the play's psychological balance, Russotto has made a strong choice about its setting: the American South circa 1961, just before the civil rights movement emerged in strength. Isabella and Claudio are African American; the duke and Angelo are white. A chorus sings hymns from black religious tradition. Mistress Overdone (spirited, amusing Verlene Biddings) and her working girls are black. So is every member we see of the religious community. So are the servants, and the two men we see in prison. You can think of a dozen ways this transfer doesn't fit--African American Christianity is mostly Protestant; Claudio's liaison with a white woman (Bobbie Leigh Carter), not some silly law, might very well have gotten him killed before he ever reached prison--and yet feel that Russotto has got the essentials right as you watch the white people running life while the black people actually live it.

Emmert is so good at scorpion roles (he was Russotto's Richard III) that it's a bit dumbfounding to see how well he plays the duke as a kindly moral hero. There's a bit of Jimmy Stewart in the characterization (though none of Stewart's folksy cuteness). The duke feels he's been missing something and that by missing it he's not been the ruler he could and should be. He's a humble fellow, ready to learn, and his adventures teach him that he is wiser and stronger than he had supposed.

With Angelo, Isabella and Claudio relegated to supporting players in the duke's story, their characters are much less vexing. Their whole triangle has the feel of a test set up in a fable--and the test isn't for Isabella but for the duke, whose duty it is to sort things out. The problem is supposed to be knotty and uncomfortable; that's why his overcoming its difficulties means something.

In his Washington area debut, Marino is an impressive Angelo--weak rather than evil, but still dangerous. Martin's Isabella is gawky as a schoolgirl, but her fundamental goodness and genuine piety make her radiant--this is the first production I've seen where, when Angelo says he's attracted to her virtue more than her body, you believe him.

The production also boasts a couple of fine clownish performances from roly-poly and supremely self-satisfied Hugh Walthall as Pompey the bawd (read "pimp") and irrepressibly irritating Chris Stezin as wastrel-around-town Lucio.

The ending of Isabella's story is left uncertain and bittersweet, but the duke's isn't--he has become master of himself and his kingdom. Refocused like this, the play emerges as the comedy its happy ending has always claimed it is.

Measure for Measure by William Shakespeare. Directed by Michael Russotto. Set, Holly Beck; lights, Ayun Fedorcha; sound, Jesse Terrell; props, Elizabeth Baldwin; dramaturg, Cam Magee; assistant director, Tim Flynn. With Jonathon Church, Theresa Davis, Jam Donaldson, Tim Getman, George Grant, John Horn, Christopher Janson, Daniel Ladmirault, Paul MacWhorter, Maura McGinn, Joanna Navas, Michelle Rogers, William Salisbury, Felix Stevenson. At Clark Street Playhouse through Oct. 10. Call 703-418-4808.

CAPTION: Taunya L. Martin as Isabella and Christopher Marino as Angelo in the Washington Shakespeare Company production set in the American South of the early 1960s.

CAPTION: George Grant and Taunya L. Martin as siblings in "Measure for Measure."