The queen of Little Italy wears a white dress and a deep tan as she waves from the parade float during one of the city's biggest Italian festivals.

The crowds lining the parade route on Mulberry Street may be munching sausage and peppers and Italian flags may be flying from restaurant doors and telephone poles. But on the fire escapes above mostly Asian faces watch the festivities surrounding the Feast of San Gennaro.

The storied Little Italy that once stretched across the Lower East Side of Manhattan has shrunk. While the days of women in housecoats and men in social clubs have not exactly disappeared, it's now as easy to find salted duck eggs in Little Italy as it is a cannoli.

Masses in local churches are not said in Italian, but Chinese, Vietnamese and Spanish. In the northern tip of the neighborhood, ethnicity--Italian or Asian--has been replaced by trendy and hip. Bars and restaurants and boutiques cater to clients in wedges and capri pants who have renamed the area NoLita (north of Little Italy). The space once occupied by the Ravenite Social Club--a former haunt of mob boss John Gotti, who now makes his home in a federal prison in Illinois--is filled by a chic housewares boutique.

When asked to define Little Italy today most old-timers would say the "old neighborhood" has shrunk to a short six-block stretch of Mulberry from Canal to Prince streets.

But for 11 days every September, size doesn't matter. In a rite that has been celebrated for more than 70 years, San Gennaro, patron saint of Naples, is venerated during a feast where history and heritage seem more important than demographics.

"If you were going to earmark a place to represent Italian history, this is it," John Belloise, of Dobbs Ferry, N.Y., said as he handed his son a zeppole--a fried, cream-filled pastry--Saturday afternoon. Though he admits the neighborhood is small now, Belloise said the atmosphere hasn't changed.

"You can feel Italian for a day here," added his wife, Keri Belloise.

The Belloise family were among the many who jammed Mulberry Street Saturday. Some were from nearby places like the Bronx, others from as far as Albany and Rhode Island. Many advertised their heritage with hats and T-shirts--"Pray for me, my wife's Italian"--and buttons handed out at the Most Precious Blood Church. Anyone who stopped in the courtyard to pin dollar bills to the red sashes draped over the statue of San Gennaro was given a button with the saint's image on it. By 4 p.m., the red was barely visible beneath the color of green.

Antonietta Silvestri filled plastic cups with wine and fruit for a steady stream of customers at the family stand. Whenever she's in the neighborhood, Silvestri, who grew up in New Jersey, can't help remembering her first visits to Little Italy 30 years ago. It was then that she met her husband, Alfonso, who had grown up here.

"It was at Ferrara's on Grand Street," Silvestri smiles. "I had a cappuccino."

The Silvestris and other family members own two of the string of restaurants on the row between Canal and Broome streets. Like many of those who own businesses here but live in outer boroughs or the suburbs, the Silvestri family lives in New Jersey.

"But the connection people have with Little Italy is kind of passed on from generation to generation," Silvestri said. "It doesn't matter where you're from, everybody wants to know this place."

It was that curiosity about Little Italy that lured Debra Lynch and her husband--"he's Irish, I dragged him along"--over the George Washington Bridge.

"After years of hearing about it, I finally made it here," Lynch beamed as a troupe of old men marched past playing "God Bless America" on trumpets and tubas. "My parents grew up in New York, right off the boat from Italy. I wanted to come back to my roots--and I really do feel right at home."

One block away, Asian families shopped along Mott Street, seemingly oblivious to the first day of a celebration that last year drew a million people to the neighborhood.

Live fish on ice share space with crates of seaweed and dried shrimp at the open air markets that line Mott Street. It was the same on most other streets in the old neighborhood. Besides Mulberry, block after block in the neighborhood looks much like this--and judging by sidewalks crammed with shoppers, business is booming.

After laws restricting Asian immigration were changed in 1965, much of Little Italy gave way as the population of Chinatown to the east and south swelled. It was a classic story of the Lower East Side: one ethnic group receded as another took its place. Chinatown's more than 100 blocks--whose population numbered 120,000 in 1990--absorb the second-largest number of recent immigrants in Manhattan--about 20,000 from 1990 to 1994 alone.

Even the feast has changed with time. In 1996, after a two-year investigation, the city ousted the founders and organizers, the San Gennaro Society, charging that they were connected to the mob. The next year a group of Mulberry Street business owners founded a nonprofit organization to run the festival.

"It was tough," said Anne Compoccia, president of Figli di San Gennaro. "But it all started here for our families; the roots are here. Why should we end this? The neighborhood is smaller, but the tradition, the heritage--it's a big thing. People come back when they celebrate, to eat, for the feast. The point is Little Italy is a very big part of people's lives."

About 11,000 people of Italian ancestry are left in Little Italy, almost the same number as were here in 1980. It is an older, second- and third-generation population that city officials don't expect to leave anytime soon. John DeLutro, born and raised on Mulberry Street just up the block from where he lives now, is one such resident.

From a float, he tosses mini cannoli to the crowds during Saturday's parade. DeLutro owns Caffe Palermo, a business he started 26 years ago with $50 and no refrigerator. He wants his oldest daughter to take over the cafe when she graduates from Fordham University next year. But having watched for 20 years as friends and family moved from the neighborhood, he's not so sure what will happen.

"There's very few fourth-generation people here," he said. "But this is the greatest place in the world. Guaranteed. Even if I bought a house somewhere, I'd still never leave Little Italy. I could be surrounded by everyone else, and I'd be the one Italian left."

CAPTION: Food vendor Sal Mario, left, prepares onions and peppers Saturday as Joseph Grasso watches at the Feast of San Gennaro festival in New York's Little Italy.