With the hoopla befitting a monumental public enterprise, Baltimore is preparing to open the first section of its $1 billion subway system next month, linking the booming Inner Harbor area with the city's rapidly growing northwestern outskirts.

Only a single eight-mile line will be ready when service starts Nov. 21. Trains will stop running after 8 p.m. on weekdays, and on weekends the line will be closed. In addition, officials have taken steps to hold down costs by eliminating what they consider gadgetry and frills.

"I don't think anybody could accuse our system of being gold-plated," said David A. Wagner, head of Maryland's Mass Transit Administration, a state agency that runs Baltimore's transit system. "It may be 30 or 40 years before Baltimore has a system of the magnitude of Washington or some of the other major cites."

Nevertheless, plans are already under way to build a more imposing rail network and officials now say they have enough money in hand to translate some of their dreams into concrete and steel.

A six-mile extension of the first line is being constructed. Scheduled to open in four years, the extension would connect the subway route with a new interstate highway in suburban Baltimore County and would tie in with the county's plans for long-term development in what is now a largely rural area near the town of Owings Mills.

In addition, state and city officials recently announced that they had found a way to finance a $300 million subway spur that would connect the rail system with the Johns Hopkins Hospital, a major employer in the eastern part of the city. The branch probably would open in the 1990s, officials say, and might eventually be extended to Memorial Stadium, where the Orioles and Colts play.

Baltimore's first rail line has been under construction since 1976, the year the Washington-area transit authority started subway service on the Metro system's first route. With the line's opening, Baltimore will join ranks with several other cities that have built rail systems in recent years, including San Francisco and Atlanta. A Miami system is scheduled to open in December.

For Baltimore, the new system--known as the Metro and financed mainly with federal funds--is viewed not only as a means of easing traffic congestion on some main arteries but also as a spur to business expansion and further real estate development in downtown and suburban areas.

The bustling 201-year-old Lexington Market, which stands near a downtown rail station, was recently enlarged with a gleaming new arcade and soon plans to run a "subway sale" to cash in on the line's opening. "We're looking at the subway as a blessing," said William O. Franz, the market's manager. "You really can't take the bus with two bags of groceries and it's a little difficult with one. You can take a bag in a subway and you're in relative comfort."

Just east of the market in a rundown section of the city's old downtown area a Baltimore firm is erecting an $18 million complex of offices and shops on a site bought from the transit agency near the subway station's entrance. Bill Pacy, vice president of Murdock Development Co., said the firm's plans include restoration of the eclectic Romanesque facade of a department store built in 1888.

At the suburban end of the line, government planners and private developers are already eyeing tracts near the future Owings Mills terminus.

The Rouse Co., developer of the "new town" of Columbia as well as the much-celebrated Harborplace complex in Baltimore's Inner Harbor area, has announced plans for a new shopping center at Owings Mills. Herbert Bangs, the county government's chief comprehensive planner, said the mall may soon become the county's "fashion center" and might eventually serve as the "nucleus of a town center."

Six years ago, the Baltimore subway was the focus of a politically charged controversy that helped launch Harry R. Hughes' successful clean-government campaign for governor of Maryland.

Hughes resigned in protest as the state's transportation secretary in May 1977, charging that Victor Frenkil, a longtime friend of former Gov. Marvin Mandel, had "tampered" with state procedures for awarding a contract for managing subway construction. Mandel's later conviction on corruption charges was not related to the subway controversy. Frenkil denied the allegations. And the state eventually awarded the contract to the firm Hughes had recommended.

Since then, the subway construction has appeared scandal-free.

Despite the Baltimore Metro's immense cost, it has been planned and built in an atmosphere mixing caution with cost-cutting. This wary approach stems, officials say, both from limitations on federal funds for subway construction and from longstanding objections to the Baltimore system from state legislators representing rural and other financially pressed counties. The General Assembly approved the Metro only after a stiff battle in 1976.

In the long term, the system's cautious strategy is embodied in a policy of building only one subway line at a time--a plan markedly different from that followed in constructing the Washington area's rail network. When completed to Owings Mills in 1987, the first Baltimore route will have cost about $1 billion. Only then do officials plan to start building the Hopkins spur.

A line once proposed to extend through northern areas of the city and surrounding county has now been scrapped, and a cheaper "busway"--a two-lane highway restricted solely to buses--is planned instead. Officials say it is far too soon to decide whether to build a southern route, possibly to Baltimore-Washington International Airport. Indeed, it is unclear, officials say, whether the Metro will ever approach the more than 70-mile system envisioned in the 1960s.

Today, the transit agency's wariness is already evident in many other ways. Its new rail cars were designed without carpets, viewed as a hard-to-clean extravagance. Its fare-collecting machines are described as less complex and less likely to break down than Washington's trouble-prone Farecard devices.

"One of the things we've done--trying to learn from other systems' mistakes--is to try to make the ticket machine as simple as possible," said Jane Howard, the Maryland transit agency's spokesman.

The electronic apparatus that controls the trains is depicted as less automated than Washington's. Officials here recall a much-publicized 1979 incident in Washington in which a Metro train left a station under automatic control while its operator was not aboard. The train was eventually stopped by a passenger. No such incident could occur in Baltimore's less-automated system, officials say.

Initially, Baltimore's subway trains are scheduled to run only from 5 a.m. to 8 p.m. on weekdays--an abbreviated timetable meant to allow time for modifications of newly installed equipment and repairs. Only gradually during the next year do officials plan to extend service, first to include Saturdays, then late evenings and, finally, Sundays.

The truncated opening schedule has prompted an appeal from Baltimore Mayor William Donald Schaefer, who does not control the subway system, to Gov. Hughes, who does. Schaefer has urged Hughes to run subway trains on Saturdays between Thanksgiving and Christmas to help boost holiday business for merchants, who faced years of disruptive construction work while the line was built. A Hughes aide said the proposal is being reviewed.

The frequency of rush-hour service also has been reduced as a result of a deal with a Florida congressman that was portrayed as likely to help Baltimore in the long run. Trains will run every eight minutes at rush hours, a significant cutback from earlier plans for five-minute intervals. The reason, officials say, is that the agreement left Baltimore with too few trains.

Rep. William Lehman (D-Fla.), the chairman of the House transportation appropriations subcommittee, wanted Miami to have enough cars to start rail service in December. Maryland officials agreed to let Miami get 14 cars previously destined for Baltimore. While no quid pro quo was announced, Maryland officials say they hope Lehman may be in a position to help solve financial problems likely to confront the Baltimore system.

The opening of the Baltimore subway line already had been delayed about a year, largely as a result of holdups in the production of rail cars by the Budd Co., a Philadelphia-based manufacturer. After Miami receives the 14 Budd cars it needs, the company is scheduled to resume shipments to Baltimore. Then Baltimore may institute more frequent rush-hour service.

Despite the transit agency's emphasis on eschewing extravagance, the new subway stations are massive, stately structures with tile floors and coffered ceilings resembling those in Washington. Each station is set off with a flourish--a huge multicolored mobile, elaborate tile mosaic and other artworks. Architects sought to stress subtle differences among stations, such as variations in the shapes of the coffers, or recessed panels.

The main station is at Charles Center, situated at Baltimore and Calvert streets about two blocks north of the Inner Harbor in the heart of the city's commercial and entertainment district.

After the Lexington Market station, trains travel northwest, stopping near state government offices, low-income neighborhoods and shopping malls. The Mondawmin station is a short distance from the 150-acre Baltimore Zoo. The line's temporary terminus will be an elevated station at Reisterstown Plaza, a shopping center near the city's border with 1,200 free parking spaces for commuters.

When the line is extended to Owings Mills, it will offer a commuting link to the planned $190 million Northwest Expressway in Baltimore County. Tracks will be laid in the expressway's median--a technique employed by the Washington-area Metro along I-66 in Northern Virginia.

Officials have issued relatively modest forecasts for the Baltimore system's first year, predicting an average of 25,000 passengers a day and annual operating costs of $20 million. Later, officials say, ridership is expected to rise--to nearly 50,000 passengers a day by the end of next year and to 65,000 in three years.

Costs are already viewed as likely to pose long-range problems. The system's construction expenses are currently being financed partly from federal funds once earmarked for interstate highways. When Maryland dropped its plans for several highways, the funds became available for mass transit projects. This source of funds, however, is expected to be depleted in the next few years, and a new source of federal aid may be needed.

More ominous, officials say, are the state's rising costs for providing subsidies to help run transit systems.

Maryland already subsidizes Baltimore's bus system as well as the costs of providing Metro subway and bus service in Montgomery and Prince George's counties. The new Baltimore rail system also is expected to require state subsidies, though the amounts likely will be small at first.

State officials have watched with increasing concern as transit subsidies climbed.

They accounted for 5 percent of Maryland's transportation funds in 1975, 10 percent in 1980 and 13 percent last year. Next year they are expected to reach 19 percent. "At some point, you do that on a straight-line basis and you see you've got one heck of a problem facing you," said Wayne McDaniel, Gov. Hughes' transportation adviser.