George Corley Wallace is back, riding his reputation as a fiery southern populist into the Alabama governor's race.

He came out of political retirement here today at a festive country picnic, telling thousands of whooping admirers he would seek an unprecedented fourth term as governor.

"I got paralyzed in the legs, but I promise you I won't get paralyzed in the head" like other politicians, Wallace said. A crowd of about 5,000 people ate it up, just like in the old days, and a wave of cheers washed over him as he sat bolt upright in his wheelchair and grinned.

Billing himself as a reformed segregationist, he pitched a paradise lost of jobs, low taxes and racial harmony, reminding supporters how he taught Washington politicians a thing or two when he ran four times for president by tapping the same kind of frustration that is now afoot in the land.

He once counted a national constituency that numbered in the millions, and didn't have to remind anyone here that Alabama has the nation's second-highest state unemployment rate: 13 percent.

Hard-luck farmers from the hills and unemployed steel workers ate barbecued ribs and chicken, baked beans and cole slaw alongside small businessmen and riffed state workers who said they believed Wallace would bring happier days.

"The number one problem is jobs," said Wallace, boasting of the industry he once brought to the state as governor.

The man who had stood in the schoolhouse door, defying the federal government to integrate Alabama's schools, says he has changed.

"Regardless of your color, we're all in the same fix," Wallace said to applause from a mostly white crowd. "We can't pay our bills, so we must join together and see all black and white Alabamians have opportunities in schools and jobs."

Many blacks say they never had it so good as under Wallace. Some credit Wallace with encouraging industries that provided jobs for low-skilled blacks.

Probate Judge Rufus Huffman, 55, a former field director for the NAACP, said, "I don't believe at any time he was a racist. What he said was politically expedient" to get elected. "You have to give a person credit for changing. Paul went to Damascus to change the church, but he was changed on the way."

Yet other blacks cannot forgive Wallace as the man who vowed "segregation, forever," before winning his first term as governor in 1962. Margaret Gaylor, 28, a black teacher interviewed at the state capitol Friday, said she had a hard time accepting the notion of a new George Wallace. "He lived and breathed segregation," she said, "he tried to keep us from going to schools. He may realize he was wrong now, but you can't erase the past."

Before he was gunned down in a Laurel, Md., parking lot on May 15, 1972, Wallace threw a scare into Democrats by winning several presidential primaries, writing a controversial chapter in American politics.

Although hard of hearing and often in pain, the 62-year-old onetime bantam-weight boxer pronounced himself in good health, brushing aside opponents' criticism that he is too weak to govern.

At his side was his third wife, Lisa, 32. Friends say Wallace was down in the dumps until he decided to jump back into politics, and credit his wife with encouraging his come-back bid. But today she discounted that: "I tell him don't let anyone talk you into it or talk you out of it."

Since stepping down as governor in 1979, Wallace has worked as director of rehabilitative services at the University of Alabama in Montgomery.

Four months before the Sept. 7 primary, polls show Wallace leading four Democrats, including Lt. Gov. George McMillan, Alabama's Speaker of the House Joe McCorquedale, and Birmingham investment banker Frank Thomas.

Gov. Fob James, a millionaire who changed parties to run as a Democrat, is undecided about running again, and plagued with the highest negative rating of potential candidates--50 percent--in a University of Alabama poll. The March survey gave Wallace 43 percent of the vote. James has until early June to decide.

James refused to live in the governor's mansion, which was in need of repairs, leading critics to wonder why, if it was good enough for Wallace, it wasn't good enough for him, says Doug Benton, a state tourism director under Wallace.

Many supporters are angry at being cut from state jobs after years under Wallace. As governor, Wallace sculpted a loyal state bureaucracy, and many state workers today said they yearned for his return.

The average man just felt closer to state government under Wallace, whose door was always open, said Tom Johnston, editor of the weekly Montgomery Advertiser, who is not a Wallace supporter.

"There is no rapport between Fob and the little man," he said. "They hunger for all the attention Wallace gave them and feel that he can move a stubborn legislature."

"He's proved himself over and over," said a state worker who asked not to be identified for fear of losing her job. She wore a purple sash emblazoned with one word--Wallace--and a red carnation and a straw hat. "He doesn't have to make any promises . . . . In Alabama, we take two things very seriously--politics and football. We've got the top of the line in both: Bear Bryant and George Wallace."

Wallace reminded his people that he had not forgotten them. "You made George Wallace," he declared in a hoarse but powerful tone. "George Wallace didn't make himself." He pointed out scores of national reporters at today's barbecue, and chuckled, "We just got $100,000 in free advertising for Alabama."

Barney Weeks, president of the Alabama Labor Council, which represents 257,000 AFL-CIO workers and supported Wallace for governor when he won in 1970 and 1974, sipped a cola and surveyed the parking lot crowd sweltering in 90-degree heat.

"Wallace was always more in tune with working people," he said. "And working people are more frustrated than ever. Wives and husbands have been laid off. People have lost their cars and can't meet payments on their homes. They're dropping life insurance policies. Imagine what that does to morale.

"If the election were held today, the others might as well hang it up. Wallace would be elected in a moment."

If he wins the primary (and a possible runoff three weeks later), Wallace is expected to face Montgomery's pistol-packing Republican mayor, Emory Folmer, a lean ex-Marine who is counting on a $2 million media war chest from national Republican campaign funds to deflate the myth of an invincible George Wallace. Slick TV ads show Folmer leading a National Guard unit on a five-mile jog.

"I can't run five miles," a smiling Wallace said in an interview. "But I can campaign."