Issac Bashevis Singer, 74-year-old author of more than two dozens works of fiction and one of the last great writers in Yiddish, was awarded the Nobel Prize for literature yesterday.

A native of Poland Singer has been an American citizen for 35 years but did not begin to reach a large American readership until the late 1950s and early 1960s when his novels and short stories originally published in Yiddish, began to be translated.

His work now appears regularly in The New Yorker, and he has had eight novels - his most recent is "Shosha" - seven short story collections and 11 children's books published in English.

When informed early yesterday that he had won. Singer first asked. "Are you sure it's true?" and then said the prize should have gone to someone else.

Singer, a New Yorker since coming to this country in 1935, was reached by reporters at a condominium in Seaside. Fla., six miles north of Miami, where he had gone to celebrate the Jewish High Holy Days. He was out for a stroll when his wife come to tell him the news, and later he recalled his reaction:

"I didn't jump. I didn't dance. I couldn't believe it. But I said to her. 'In any case, let's eat breakfast.We have to eat. What do you think - you stop eating because of heppiness?"

He finished the meal before going up to his 11th-floor apartment, where a small army of reporters and Photographers outside the door convinced him that the report was true.

The Nobel prize carries a cash award of $165,000. Singer is the second American Jewish writer to win it recently, following Saul Bellow in 1976. The most recent American winner before that was John Steinbeck in 1962. Eight Americans have now been chosen, beginning with Sinclair Lewis in 1930.

Singer was born July 14, 1904, in Radzymin, Poland. He anticipated the Nazi invasion of his native country and emigrated to the United States in 1935. Among his best-known works are "A Crown of Feathers," a short story collection and "The Family Moskat," a novel about Jewish life in Warsaw on the eve of World War II.

A son and grandson of Hasidic rabbis, Singer writes about the nearly vanished world of Eastern European Hasidim, a world known to American through "Fiddler on the Roof," which was based on the stories of Sholem Aleichem. Elements of the supernatural legend and folklore appear throughout Singer's work, which is deeply rooted in the rich communcal life of small villages but often explores how that life was transformed in the Warsaw ghetto and passage to the New World.

Demons, would be messiahs, rabbis debating fine points of the law, emaciated Talmudic scholars and miracle workers are frequent figures in his fiction.

Singer's world has been uprooted and threatened - first by the Nazis and Communists in Eastern Europe, then by demographic pressures in New York's Lower East side, where although some stores still bear signs in Yiddish, they are now outnumbered by sings in Spanish.

Following in the tradition of Aleichem and Sholem Asch. Singer is probably the last great American writer in that tradition. Remnants of Yiddish literature still exist in the Soviet Union, but suffer from political and economic problems.

Singer's writings still appear first in Yiddish in a New York newspaper, the Jewish Daily Forward, where he was a reporter and columnist for decades.

Rumors in Stockholm before the announcement suggested a conflict within the academy between a faction favoring British novelist Graham Greene and another backing Turkish writer Yasar Kemai, which might have encouraged a compromise choice.

In announcing the award to Singer, the Swidish Academy praised him "for his impassioned narrative art which, with roots in Polish-Jewish cultural tradition, brings universal human conditions to life."

Singer's decision to continue writing in Yiddish, although he has long spoken English fluently, is appropriate to his chosen subject matter, which he has described in these words:

"I deal with unique characters in unique circumstances, a group of people who are still a riddle to the world and often to themselves - the Jews of Eastern Europe, specifically the Yiddish-speaking Jews who perished in Poland and those who emigrated to the U.S.A. The longer I live with them and write about them, the more I am baffled by the richness of their individuality and (since I am one of them) by my own whims and passions."

Although his books have been translated into 17 languages, including Hebrew. Russian and Serbo-Croation, Singer describes himself as "nothing more than a storyteller" and added that he was "sorry that writers greater than I did not get it.

"The greatest writers of all times did not get it. Tolstoy was a candidate and some other writer got it. So, the prize, while it's pleasant to get it, it doesn't prove, really, so much . . ."