Three years ago, when this little Los Angeles suburb was named an All-America City, the multicolored string of Asian shops and restaurants along Garvey Avenue and the city newsletters in Chinese and Spanish seemed to reaffirm its image as the California of the future -- integrated, prosperous, peaceful.

Today, the woman who was the nation's first female Chinese-American mayor and her two Latino colleagues on the city council are reeling from their reelection defeat. Politicians as far away as Sacramento and Washington, D.C., are wondering whether Monterey Park signals a rebirth of anti-immigrant politics that appears in turbulent cycles in American history.

Despite an influx of legal and illegal immigrants, California voters until recently had remained surprisingly nonchalant about the situation, at least in comparison with the violent way they reacted to the last major immigrant surge a century ago.

Despite grumbling about county hospitals full of penniless immigrants and sharp debates about bilingual ballots and elementary school classes taught in foreign languages, no significant election since World War II has appeared to turn on the immigrant issue.

Now, however, California is moving toward what demographers say is the inevitable day, perhaps as soon as a generation away, when Anglos will become a minority of the state's population. The strain is beginning to show.

At least two leading candidates for the Republican nomination for the U.S. Senate, Los Angeles County Supervisor Michael Antonovich and U.S. Rep. Edwin V.W. Zschau, have featured immigration-law overhaul in campaign speeches, with Antonovich suggesting that troops be used to stop the flow of undocumented aliens from Mexico.

In a move aimed at overcrowded Latino and Asian housing, a majority of the Los Angeles City Council has welcomed a bill limiting the number of people who may share a bedroom.

USENGLISH, a Washington-based group determined to make English the official U.S. language and end such practices as bilingual ballots, has become one of the nation's fastest-growing nonprofit organizations. More than 65,000 of its 180,000 members, who pay $20 to join, live in California.

An initiative to make English the state's official language is expected to appear on the November ballot and seems to have a good chance of passing. At least six other states, including Virginia, have such measures on their books.

"There are real, popular concerns over immigration, and this is the first time they have forced themselves into the public agenda," said Roger Conner, executive director of the Washington-based Federation for American Immigration Reform (FAIR).

Monterey Park, population 60,000, is an obvious place for a collision between the immigrant influx and native resistance to it.

In 1960, the city was about 85 percent Anglo. Today, it is about 22 percent Anglo, 37 percent Latino and 40 percent Asian, producing a clash of attitudes as glaring as the sentiment expressed on a huge service-station sign here: "Will The Last American To Leave Monterey Park Please Bring The Flag."

Lily Lee Chen, a Chinese immigrant and county administrator whose unprecedented term as mayor brought national headlines, was sued for $1 million by the sign's owner when she objected to the message on behalf of the council. The suit was thrown out but marked the opening volley in a war of bad feeling that has turned the city's political life upside down.

Political novices Chris Houseman, Barry L. Hatch and Patricia Reichenberger transformed resentment over crowded streets, foreign-language signs, proliferation of mini-malls and fears of further development into a council election upset last month.

Chen, 49; school principal David R. Almada, 40, and production manager Rudy Peralta, 59, all incumbents, lost in the at-large race.

Houseman, 27, an antigrowth activist; Hatch, 49, and Reichenberger, 40, who championed English as the official city and state language, won those seats and gained an instant majority on the five-member board. Reichenberger, third with 3,778 votes, defeated Chen by more than 600 votes. The other council members are of Filipino and Italian descent.

Rep. Matthew G. Martinez (D-Calif.), a former Monterey Park mayor and an ally of the deposed council members, played down the impact of anti-immigrant feeling. "There might have been some adverse reaction," he said. But the antigrowth issue and campaigning by city firefighters upset at council involvement in appointment of a new fire chief, were more important, he added.

To varying degrees, the three ousted incumbents disagree, with Almada most outspoken on the racial element. "There was a backlash" to the sudden influx of Asians, he said. "I saw six months ago I would likely lose," he said, after he voted against the pro-English initiative.

However, the backgrounds of the three Anglo winners and the reaction they inspired in voters suggest that their success cannot be attributed simply to racial backlash.

Hatch, a teacher in a predominantly Latino intermediate school in nearby Bell Gardens, speaks fluent Cantonese and served three years as a Mormon missionary in Hong Kong. He said Cantonese-speaking residents greeted him enthusiastically as he campaigned and immigrants told him the city is turning into the kind of bedlam of noise and humanity they had disliked in Hong Kong.

"The Cantonese people are mellow, beautiful people," Hatch said. "Many of the longtime residents welcomed me with open arms, and the Japanese even more so."

Some Hong Kong-born Chinese immigrants indicated that they distrusted Chen, since she speaks the Mandarin northern dialect used mostly by immigrants from Taiwan.

Ethnic appeals from supporters of the two Latino council members also may have offended some Latino voters. One local resident wrote to the local newspaper asking, "How dare you assume that because we are Hispanic we are going to vote for you?"

Reichenberger, a sales representative for an office-supply company, has lived here since she was 7. Active in the PTA, youth athletics and local charities, she became friends with several longtime residents of Asian and Latin descent. She said they cheered her early battles with developers who ignored residential concerns. When she decided to run for the council, she said, the same people were "absolutely delighted." Despite intense early campaigning in predominantly Latino and Asian neighborhoods, she said, "I never had one door slammed in my face. Everybody wanted to talk about what was happening to the city."

Hatch was born here and lives with his mother, 82. He found himself pushed into action after he discovered "my mother couldn't communicate with the people in the stores any more. When she went there, it was confusing, and they were selling all these things she didn't need."

As new condominium and commercial construction began, much of it funded by entrepreneurs from Hong Kong, the city seemed slow to respond to complaints, Reichenberger said. She needed state help to force a builder to erect a fence to keep neighborhood children out of a construction excavation.

Reichenberger, Houseman and others managed to win approval in 1984 for three initiatives limiting condominium units in some areas but still found themselves at odds with the council majority and its planning commission appointees.

Chen fumed at the suggestion that she did not try to control growth. "Sure, they got limits on quantity, but that did little good in improving quality," she said. She said it was ironic that election victors complained about shabby little shops popping up in mini-malls, as growth limits often left developers with only that alternative.

After her defeat, Chen said, she avoided raising the racism issue for fear of dividing the city further. But she said in an interview that she was upset by a cartoon campaign leaflet distributed by Frank J. Arcuri, one of her harshest critics and opponents. The cartoon shows Chen scrubbing dollar bills in a huge basin, with Asian shops and caricatured figures in the background. "CHEN'S LAUNDRY," says the sign above her head. The caption reads: "campaign contributions laundered."

Arcuri finished last in the election, with 1,992 votes. Hatch and Reichenberger, allied with Arcuri in the pro-English movement, disavowed the cartoons. Arcuri told one local newspaper that his defeat did not bother him since the three incumbents also lost. "I'm the candidate that put the problem square on the head," he said.

Chen said none of her opponents denounced the cartoon during the campaign.

Hatch still complains about media coverage of the English-language campaign. "They treated us like bigots, like racists," he said, displaying a local newspaper editorial cartoon. It shows a vulture labeled "Proposed English Only Law" watching over hatching eggs marked "Bigotry," "Hate," "Racism," "Freedom of Speech Loss" and "Confusion."

Hatch and other supporters of the change argue that the movement is designed to help immigrants improve their economic and social lot through rapid integration into society.

Chen calls the movement to make English the official language "punitive, divisive and potentially unconstitutional." In the campaign, she cited the city's success in obtaining state money for a volunteer tutoring program as a better way to close the language gap.

Demographers and political analysts studying the immigrant flow into southern California have suggested that the turnabout here is only temporary, that the political influence of Latinos and Asians will grow steadily. "A lot of the Asians aren't citizens yet," Almada said, "but they will be in 10 years."

Hatch argued that this overlooks increasing resentment of new immigrants. Acknowledging this, Chen noted that she even hears her two children, both young adults, speak of their differences with the "FOBs" (Fresh Off the Boats).

Spanish-language telephone yellow pages have proved successful here, and the phone company has begun to experiment with bilingual operators. Despite resistance from teachers such as Hatch, the school system still offers bilingual classes to children who have been here four years or more.

Such developments are self-destructive, according to Hatch, who said the U.S. border should be closed to illegal aliens and such aliens should not be provided government services. "The American people, as friendly and as generous and as flexible as they are, have come to a point in the road where they want proof that their rights and their dreams are not all going to be replaced," he said.