Perhaps only a decade ago, the locals recall, Indians were forced to walk down the middle of the streets here. The sidewalks, the entrance to the squat Spanish homes, to the convents and the mansions of the well-to-do, were off-limits to the indigenes. The Spanish founders and their descendants had kept San Cristobal proudly white and pious, despite an ancient papal bull from Rome stating that the Indians were indeed "true men."

The arrival of the automobile, rather than democracy, has driven the Indians onto the sidewalks of this Indian metropolis in Mexico's far south. But the 300,000 indigenous people who inhabit the central highlands around San Cristobal still appear to live by the spirit of a 16th century Spanish ordinance which forbade Indians to stay in town after nightfall.

The ordinance no longer exists. Yet the thousands of men, women and children who descend on San Cristobal market every day hurry out of town in the afternoon. They climb into the open cattle trucks which brought them for another one- or two-hour ride along rutted tracks back to their cold and dark huts on the high plains.

They carry their goods as they did in pre-Columbian times, hanging from a leather belt or cloth tied over their head, and the neck bears the pressure of a 40- or 50-pound load.

Inhospitable as San Cristobal, or Jovel Zotalem, as the Indians call it, is to them, it is their social headquarters. On the large market, Zoques, Tzeltales, Lacandones, Choles and Tzotziles Indians from scores of communities and hamlets recognize each other by tassels and ribbons, by the form of a hat or the designs of a cummerbund which vary from place to place. Even their rank within the community can be told from the shape of a tunic, the knot of a handkerchief.

Yet Jovel Zotalem is not theirs. They use it -- or, rather, the town uses them. The shopkeepers, middlemen and politicians behind the thick Spanish walls have always lived off cheap Indian labor and off the corn, gourds, chickens and firewood the Indians carry in on their backs. The Indians spend their earnings here on rubber sandals, expensive medicines and on candles and fireworks for their perennial religious festivals.

The best business, it is said, is done in "posh," the local firewater. Fernando Benitez, Mexico's foremost writer on indigenous life, calls it "the fuel that lubricates the complex machinery of Indian life."

The "epicenter of Amerindian culture," as a Harvard anthropologist describes the Mexican south, "is the most studied region of Mesoamerica." Linguists, ethnologists, sociologists from the United States, France and Germany have come to make inventories of all aspects of Indian life before it disappears. Catholic priests, Wycliffe Bible translators, Adventist missionaries all have flocked here trying to win souls, as have politicians, educators and communicators appointed by Mexico City.

Hundreds of outsiders in fact gyrate like satellites around this harsh Indian world. Now oil prospectors, geologists and other survey crews have come to probe for wealth beneath all this poverty. Mexico's most prolific oil fields are only a few hundred miles away.

Despite the seduction and pilferage by whites and mestizos (those of mixed blood), the Indian groups have retained powerful moral communities to protect themselves against a world in which they know they are widely disdained.

It is one of the incongruities of Mexico, where the large majority is mestizo, that racism against the Indians prevails. After the 1917 revolution, official culture proclaimed that Mexico's roots and identity lay in its Indian, not its Hispanic, past. Its heroes, the emperors Tezozomoc, Moctezuma and Cuauhtemoc, are cast in great statues in the capital.

It is no surprise to people in Mexico City that a new monument to fallen policemen should be the statue of Coatlicue, the ancient goddess of life and death, with a wounded Aztec warrior at her feet.

But the Indians are safely revered as enshrined heroes. Contemporary Indians, although they give the country a case of c collective bad conscience, are looked down upon. The word Indio is an insult. Middle-class couples in the capital prefer to adopt their babies in Spain, rather than taking the darker-skinned local orphans. The newspaper advertisement for a receptionist "of good appearance" is a euphemism for light-skinned.

All the same, 80 percent of Mexico is said to have at least some Indian blood. For the 7 million Indians who have turned inward, who live by their magic, mixed religion, witch doctors, expensive ceremonies, close family ties and effective internal democracies, the government has devised programs to modernize them and, it hopes, to protect something of their heritage.

"Eventually we will all be absorbed by the rest of Mexico," said a Chontal Indian teacher working for the National Indigenous Institute here. "I have a friend, a Tzeltal Indian. He calls himself Kelvinator Perez. He saw the word on the refrigerator in the institute."