Open for lunch Monday through Friday, noon to 2 p.m.; for dinner daily, 5:30 to 11 p.m. AE, CB, MC, V. Reservations. Prices: Lunch main courses average $5; dinner main courses average $9.

Transformation is the art of the Indian kitchen. Milk is transformed into firm cheese to be served sweet or savory, poached or fried; or into yogurt that then becomes a sweet, flower-scented liquid refreshment called lassi or a tart vegetable-filled salad called raita or a marinade that tenderizes and flavors meat. Cooks of the Indian subcontinent transform lamb into hundreds of varied grills and curries. They transform fruits into fiery pastes -- chutneys and pickles -- and flour into breads that puff, crunch or tear into firm shards to scoop up curries.

Katmandu, the first Washington restaurant to specialize in cooking from India's northern border -- Nepalese and Kashmiri -- has gone so far as to transform a small space on a busy corner into an exotic world of tastes, smells and colors in three small rooms. A few steps down from Connecticut Avenue is a bit of garden, in itself a surprise, leading to Katmandu's front room, lined with ruby velvet banquettes under a canopy of bright folk art appliques. The walls are dark wood and mirrored, intensifying the blue lights in lacy peirced metal globes. The resultant spaces are quiet and intimate, with plush touches but the personality of folk art. You may notice, as you take your seat, that the banquettes are hung so high that your legs dangle, but you likely will be diverted by the arrival of garlic-drenched pappadums, wonderful paper-thin fried wafers.

You will need them as you pore over the menu. It is long, full of unfamiliar dishes that all sound the same in their descriptions; most of them are designated as house specialties. Two dishes, in fact, are called simply "Katmandu Specialty." Choosing is a matter of blind decision, whether you feel like having "Himalayan herbs" or "rich sauce," or pick among mutton filet or cubes or pieces or minced.

Ease in through the appetizers. There are only six choices, three of them pastries, pretty little rounds of dough twisted into topknots and filled with mildly seasoned meat. The delight of the pastries is visual, for they taste lifeless until you add chutney; two of them fortunately come with a creamy, tart chutney flavored with chiles and coriander. More intriquing if less pretty are charcoal-grilled minced meat kebabs and big, soft pillows of fried minced chicken. The soup, a limpid pale yellow broth of lentils, has the richness and tartness of Greek egg-lemon soup with more complexity; it is a suave concoction.

Whatever you order, it won't blaze with hot peppers, but will at best smolder a bit. If you like it hot, you will need to ask. The menu includes smatterings of fish and shrimp, beef and even pork, surprising to find on an Indian-style menu. If the menu looks familiar, it is indeed a close relative to the menu at Tandoor restaurant, with which it shares ownership. But the seasonings set this one apart. Northern Indian cuisine is said to be that region's most elaborate, and Katmandu's kebabs and curries are elaborately -- if mildly -- seasoned so that something is activating every area of your tongue. Kabab murgh tikka and charoko sekwa look the same reddish gold bits of joints of chicken one finds at Tandoor, but they have the tartness of yogurt, a mustard-like tang, a tickle of various spicy perfumes, and a slow build of light pepperiness. The spices have permeated the meat, and the tenderness contrasts with the crispness of the grilled surface. This is subtle food, and prettily arranged around a mound of tinted rice. The colors are more vivid than the seasonings, whether marigold-colored fish filets or red-tinged lamb filets. If the meats or fish lack succulence, being cooked or marinated to firmness, they intrigue with their flavors, the heavy vinegariness of the mutton or the wafts of cumin, coriander and perhaps allspice in everything from land to sea. The biriani, which most Indian restaurants present as a savory or hot blend of rice with raisins and nuts and meat or seafood, at Katmandu is dark brown and highly seasoned with sweet spices. The mutton curry with onions also has a pleasant sweetness in its fragrance that comes from spices, not from actual sugariness. Repeatedly the diner encounters an elegance of seasoning -- if not always of texture -- that makes an unsauced fish or chicken filet engaging.

Katmandu's breads are indistinguishable from the usual wheaten flat or puffed breads found at most Indian restaurants, and the desserts are the old reliable rose-scented and pistachio-sprinkled cheese patties or starchy white puddings. Most soothing is an ending of milky Kashmiri tea with fennel and cardamom, reminiscent of hot milk and honey you might have been given as a child to lull you to sleep.

If your food is lukewarm at Katmandu, you might take that as a cultural statement rather than an oversight, for the service is attentive.

There is much to appreciate at Katmandu, particularly if you visit at lunch, when the prices are substantially lower than dinner. Main courses at lunch average $5, appetizers about $2, while at dinner meat or seafood dishes start at $7.50 and climb to $12; vegetarian dishes at dinner average $6 and appetizers are $3 or $4. A $10 lunch may display more flaws than a $20 dinner, and higher priced dishes such as a $12 mutton filet tend to be disappointing. But that is no reason to avoid Katmandu and miss trying the newest cuisine in town.