Cigarette smoke billows through the lungs like fog through San Francisco's Golden Gate. These moving clouds rain cancer-causing chemicals on the cells lining the lung.

Fluids carry the chemicals into surrounding cells, where enzymes convert them into cancer-causing compounds, or carcinogens. Over the years, waves of carcinogens randomly batter the cell.

Cellular repair mechanisms can reverse much of the damage, but eventually, enough injury accumulates in the gene's chemical essence -- called deoxyribonucleic acid, or DNA -- that it becomes changed. When certain normal genes are inappropriately "turned on" by repeated injury, they are transformed into active oncogenes, which drive cell division out of control.

"Cancer is, at least in part, a genetic disorder," says Dr. Philip Leder, chairman of the department of genetics at the Harvard Medical School.

A single cell with activated oncogenes divides into two cells, then four. Each cell doubles until a lump of disorganized dividing cells begins to form. The mass gets larger; groups of cells begin to break away and spread the growth.

A cancer is born.

This process is repeated countless times in humans and other animals in every bodily tissue -- skin, lung, breast, colon, blood. It is caused by DNA damage from a variety of sources including chemicals in food and in the environment, stray bits of ultraviolet and even cosmic radiation, a few specific viral infections and random genetic alterations.

Most of this genetic damage won't cause cancer. But 1.3 million times a year, it will lead to the diagnosis of America's most dreaded disease.

The fear caused by cancer, however, goes beyond the 440,000 deaths it will cause this year. It's the fear of helplessness and hopelessness, of pain and suffering from both the disease and the treatment, and the belief that death is inevitable.

"The American people are unduly pessimistic about what happens to them when they have cancer," says Dr. Vincent T. DeVita Jr., director of the National Cancer Institute. "Truly half the cancers in this country are curable."

President Reagan's recent bout with colon cancer may have a tremendous impact on the public's cancer consciousness, several experts predict, much as the breast cancers of Betty Ford and Happy Rockefeller changed the way women viewed that disease in the mid-1970s.

"I think, given the president's personality, his ability to reach out and touch everybody," DeVita says, "a lot of people will pay attention to cancer."

The president's case shows the public "that you don't have to die of cancer," says Dr. Frank Rauscher, vice president of medical research for the American Cancer Society. "We can see we can control cancer."

The cancer outlook is improving, and not just for the president. In 1930s, therapies kept fewer than 20 percent of cancer patients alive for five years. In the 1940s, five-year survival reached 25 percent. Now 50 percent of cancer patients survive five years, and for children, although the number of cases is small, some 60 percent will survive their illness.

"The news is good," says Rauscher. "I feel in my bones that we are in the golden age of cancer research."

Major discoveries are pouring out of research labs from Boston to Bethesda to Berkeley. Oncogenes, the switches that activate cancer, were discovered within the last decade, and work is under way to learn to defuse them. Scientists have discovered how cancer cells spread to other parts of the body and are working on ways to block that movement. New forms of radiation, new drugs, monoclonal antibodies and less-mutilating surgery all contribute to a longer survival and a better quality of life for cancer patients.

"We used to have a black box," says NCI's DeVita, describing the scientific understanding of how cancer works. "Now we have the blueprint.

"In the community of cells in the whole body, a cancer cell is an outlaw. It does not obey the rules . . . that you divide up to a certain point in the space that you are allowed . . . and you stop when you are told to stop. A cancer cells does not obey the signal to stop. Basically, cancers kill by getting into an organ where they don't belong and growing without any control, and crowding out the normal function."

Acell must go through at least four steps to become cancerous, says Dr. Curtis Harris, chief of the NCI laboratory of human carcinogenesis.

First, some damaging force -- like cigarette smoke -- activates an oncogene, preparing to make the cell cancerous.

Second, these precancerous cells begin to grow more actively than their neighbors, but they are not yet true cancers.

Third, another mutation occurs, converting the growing, precancerous cell into true cancer.

Finally, says Harris, the tumor evolves as the cancer cells become genetically unstable and undergo rapid mutation.

If cancer cells stayed in one place and simply grew larger, then "cancer could be treated with surgery and patient would be cured," says Dr. Lance Liotta, chief of the NCI's laboratory of pathology. But cancer cells have the ability to spread to other parts of the body and begin to form a new tumor, which in turn can also spread.

"Cancer invasion and metastasis is the main cause of treatment failure," says Liotta. "That is really what kills the patient in most cases."

Tumors grow as balls of cells surrounded by dense tissue called a basement membrane. To spread to other body parts, the cancer cells break through the basement membrane and crawl like an amoeba into nearby blood or lymph vessels, says Liotta. Once there, they can ride to a distant part of the body, where they lodge in a capillary, crawl into nearby tissue and begin growing again.

By studying how cancer cells spread, Liotta's group has discovered a protein on the surface of the cancer cell called laminin which plays a central role in breaking through basement mem- branes. By blocking the laminin molecule, Liotta has been able to stop the spread of cancer in mice. This approach could freeze cancers wherever they are and allow surgeons to remove them.

"The major cures of cancer are still surgery and radiation," says Dr. Samuel Hellman, physician-in-chief of Memorial-Sloan Kettering Cancer Center in New York. "The president got cured with the most effective cure around -- effective local surgery."

Cancer surgery -- which cures when it removes all of the tumor cells -- has changed in recent years. Amputation of an arm or breast is less common, says Hellman. Increasingly, surgeons remove the lump of cancerous tissue and scrub away the remaining cancer cells with radiation.

Radiation therapy has also improved. Over the past 50 years, physicians have used powerful beams of x-ray and electrons to kill cancer cells. But cancer cells often escaped because the tumors could not be adequately located, because the amount of radiation that could be used was limited, and because solid tumors have oxygen-poor centers, a factor in cancer cell survival. Now, new imaging devices -- such as CAT scans and magnetic resonance imaging -- can precisely locate the tumor, allowing computers to aim maximum radiation doses into it.

Radiation therapists have begun experimenting with new types of radiation, such as the neutron beam, and drugs that sensitize the cancer cells to radiation's lethal effects.

Researchers also are experimenting with hypothermia, or heat treatment, to make the cancer cells more sensitive to both radiation and chemotherapy.

Another cancer therapy, chemotherapy, always has been hampered by its inability to kill cancer cells without killing or severely damaging normal cells. This also is changing.

"We really are begining to understand the molecular biology of drug response," says Dr. Bruce Chabner, director of NCI's division of cancer treatment. "Malignant cells, because they have unstable genes, are able to quickly adapt to toxic environments. They mutate to drug resistance very readily."

Researchers already have found that using combinations of several drugs can help overcome this problem. They also are looking for drugs to keep cancer cells from becoming drug resistant.

But perhaps the most exciting development in chemotherapy are so-called "biological response modifiers" such as interferon and monoclonal antibodies. These drugs change the activity of a cancer cell or other body well without poisoning it.

Tumor necrosis factor, a natural body protein, "is magic -- it is amazing," says Hellman. "In animal tumors, it causes tumors to necrose, to die. We don't know how it works. TNF does not work in all cancers and in all people." Several gene engineering companies are now able to manufacture TNF in a laboratory, and human clinical trials are to begin in the United States later this year.

A number of the new drugs also may prevent cancer from forming in the first place, says Chabner.

Such drugs have been known for 40 years, says Dr. Lee Wattenberg, professor of laboratory medicine and pathology at the University of Minnesota School of Medicine in Minneapolis. But "the field of chemoprevention . . . is in its infancy.

"A number of scientists are trying to devise optimal compounds that can be used in intervention for individuals at high risk," says Wattenberg. "With the advent of chemopreventive agents, there is a chance of doing something to prevent the occurrence of cancer."

Chemicals are being discovered that can "keep the body cancer-free or resistant," Rauscher says. One day, "we could have a pill you take with your morning orange juice."

On every front, progress is being made in the fight against cancer.

"Now you ask me the question: 'Are we winning the war?' " says the cancer institute's DeVita. "Well, if you were fighting a war, and you knew exactly how many troops the enemy had , and exactly where they were going, and exactly what plans they were going to use, and you had the code machines to break their code so you knew any time they changed the plans, I would say that you had gone a long way toward winning the war. "That's where we are on cancer."