In 1960 Adams-Morgan was supposed to die of urban renewal. In 1970 it was dying of decay. In 1980 it was succumbing to gentrification, its many analysts insisted, and the salsa beat of its ethnic heart was surely doomed.

Today, with a social and economic resilience that continues to confound the experts, the most richly American neighborhood in the nation's capital will once again get up and dance.

During Adams-Morgan Day, 1984 -- an event billed as the largest street fair on the East Coast -- the merchants and about 16,000 residents of Washington's least homogeneous 237 acres will celebrate the vitality and diversity of their city-within-a-city and laugh once again at those who said it couldn't last.

It is lasting, at least for now: a neighborhood of houses and high rises, of Salvadoran cleaning women and Pakistani housewives, of Jamaican drum players and wine-sipping Yuppies, of gay shopkeepers and black activists.

You can buy a neon sculpture in Adams-Morgan or a Maoist tract, a Peruvian empanada or a crawfish pie. You can cater a White House dinner, have an Oriental rug appraised, see a movie in Spanish or drink a beer at the Cafe Lautrec while a black hoofer named Jahne tap dances on the bar.

"This neighborhood works the way a city is supposed to," says Valerie Lee, 30, an oceanographer with the National Oceanic and Atmospheric Administration who moved to Adams-Morgan this year from Miami.

"Every kind of business you could need from banks to bars to markets and dry cleaners is here within a couple of blocks . . . . There's a real vitality to the street life yet it's small and intimate enough so you see people you know on the street and they speak to you."

"I think it is very economical to live in Adams-Morgan," said Michael Askarinam, 30, an Iranian who has just opened a restaurant on 18th Street. "It is possible to rent a quite nice apartment for $340 a month, and I believe this is the friendliest part of the city with a mix of people I like."

Perched on the rolling topography north of S Street between 16th Street NW and Rock Creek Park, Adams-Morgan has been "discovered" by succeeding waves of students and immigrants, investors and young professionals, small-business owners and restaurateurs ever since the 1960s.

But despite -- or perhaps in part because of -- such disparate forces as real estate speculation, urban crime, cultural confrontations, racial tensions, political rivalries and gentrification, the neighborhood has continued to attract and house a racial, economic and ethnic mix of residents and businesses.

The area's politics is as yeasty as its population. Where else can a casual stroller be confronted with posters boosting factions ranging from the "Grupo de Trabaho Farabundo Marti" ("No a los Asesinos!") to the Tigray People's Libration Army, a separatist movement in northern Ethiopia.

As might be expected, such diversity has attracted legions of social scientists, historians and journalists, eager to find somewhere in the peculiar chemistry of Adams-Morgan answers to the enduring problems of America's cities.

Betsy Miller, archivist with the Columbia Historical Society, says Adams-Morgan has been easily the most studied of the District's neighborhoods, and continues to draw the attention of both academics and amateurs in the Society's library of Washingtoniana.

The Washington Post has devoted literally dozens of long analytical articles to Adams-Morgan over the years, as did the now defunct Washington Star. "Adams-Morgan: A Melting Pot About to Boil" said an article in 1963. Seven years later it was: "Adams-Morgan-D.C. Neighborhood in a State of Flux". Last May, another series ran: "Adams-Morgan: Neighborhood in Transition."

By now, after about 20 years, that transition -- the sort that had transformed Georgetown from a community of poor blacks to one of upper income whites -- should have been long finished. In fact, Adams-Morgan is richer and more diverse today than ever before, infused not only by a growing Hispanic population but by Caribbean, Asian and African immigrants for whom Adams-Morgan is the logical first stop in a new land.

The once shabby storefronts of 18th Street have been brightened by new shops and restaurants. Business is booming.

Yet despite property values that boosted the average house price in the neighborhood from $27,116 in 1970 to $123,362 in 1979 -- nearly $30,000 above comparable figures for the District as a whole; despite building conversions that have transformed $400-a-month apartments into $150,000 condominiums; despite a continuing influx of young middle and upper income whites; despite the very sort of social and economic forces that operated in Georgetown and Capitol Hill, Adams-Morgan has kept its essential character.

How and why?

Some of the answers lie in the history of Adams-Morgan, as filled with ironies and paradoxes as the community itself.

Built for the most part in the early part of the century, Adams-Morgan was at first a complement to the Kalorama Triangle to the west -- a genteel, upper-income neighborhood on the scenic heights above Washington.

Spacious and elegant apartments attracted congressmen and senators and 18th Street became something of a grand address.

According to records of the Columbia Historical Society and a 1982 George Washington University study of the neighborhood, blacks became part of the neighborhood when wealthy families with servants commuting from Anacostia helped them buy houses in the neighborhood's less desirable lowlands.

The neighborhood received its present name during the 1950s when whites in the attendance area of the then-segregated Adams Elementary School joined forces with blacks served by the all-black Morgan Elementary School in an integrated civic association designed to challenge major urban renewal plans for the area.

The fractious cooperation of those first efforts, Adams-Morgan oldtimers say, planted the seeds of ferment and controversy that survive in the neighborhood today.

The postwar exodus of whites from the city sent the neighborhood into decline through the 1950s. But by fighting off plans that would have obliterated much of the neighborhood and replaced it with luxury apartments, Adams-Morgan residents learned they could fight to control their own destiny. They've been fighting ever since.

In the wake of the 1968 riots, remembers real estate broker George Dravillas, "you couldn't give property away in Adams-Morgan," even though the riots themselves left the neighborhood untouched.

Dravillas, a Greek-born man of 59 who has watched the fortunes of Adams-Morgan for 50 years, remembers that when the back-to-the-city movement began in the early 1970s, he said, "we couldn't even use the name Adams-Morgan. The brokers would say 'we can't sell Adams-Morgan. Call it Kalorama Triangle.'"

But after the gas lines of the 1973 energy crisis caused many people to question the ideal of a long commute to the suburbs, "those young white people came in here and bought up everything in sight. You could buy a house one day for $40,000, turn around and sell it for $80,000. I never see anything like it."

Adams-Morgan, however, was more than single family homes. Unlike Georgetown and Capitol Hill it had an unusually large number of large apartment buildings with sunny, spacious apartments.

Speculators had bought up and broken up similar big apartments into more economical units elsewhere in the city, Dravillas remembers but "everybody was afraid to put that kind of money in Adams-Morgan then. The neighborhood was too rough."

When many of the apartments came under rent control, they were insulated from the escalating prices elsewhere in the city, and many Hispanic immigrants moved in.

When condominium conversions began displacing people in the neighborhood, tenant activists in the Adams-Morgan Organization convinced the city government to pass a succession of precedent-setting measures giving tenants the first right to buy any building threatened with conversion.

Those measures and rent control, Dravillas believes, have helped preserve a supply of affordable housing in Adams-Morgan. Many people have been displaced, he said, and many more probably will be. Some of the lowest income blacks, he thinks, may eventually be priced back east of 16th Street.

But Adams-Morgan will continue to hold lower income people, he said, because of the immigrant ethic that underlies much of the vitality of Adams-Morgan.

"Some of these Hispanics, they just want to wait for the welfare check," Dravillas said. "But most want to work. They work two jobs and they pay their rent. If they're good tenants it pays the landlord to keep them."

"And you take the Ethiopians," he said. "They are just like the Italians 70 years ago or the Greeks 50 years ago (immigrating to America). They want to accumulate capital. We have seven Ethiopian restaurants. As they make money, those Ethiopians bring in more Ethiopians and they work hard and they buy and they invest."

What is happening now in Adams-Morgan, Dravillas said, is that enough upper scale people have moved into Adams-Morgan so that they need and want businesses at the very time small-business owners are being priced out of the Connecticut Avenue corridor.

"Wisconsin Avenue is too far away. So they are coming here, these little stores and restaurants. And that is making jobs and money." which in turn helps keep "those who want to work" around.

Adams-Morgan is, indeed then, still in transition, Dravillas believes. But it is a transition of continuing vitality that may be less threatening to the character of the neighborhood than any alternative.

"You say there is a change," he said. "But change is always here before." In Adams-Morgan, he said "that is who we are."