Has Eliot L. Spitzer finally bitten off more than he can chew?

For six years now, the New York attorney general has been building a national reputation by taking on powerful opponents and finding creative new ways to use existing law to protect investors and workers.

His targets in the past have included everyone from big Wall Street investment banks and the $7.5 trillion mutual fund industry to polluting power plants and supermarket chains that underpaid delivery workers. Many have agreed to pay money rather than risk a public battle.

Now his adversaries are fighting back, and Spitzer's unusual efforts to use state law to change national policy will be tested in court. The first mutual fund executive Spitzer charged criminally has challenged a key legal basis for the New Yorker's entire investigation of improper mutual fund trading. And last week former New York Stock Exchange chief Dick Grasso made clear that he will make Spitzer and his political ambitions the issue in their battle over Grasso's nearly $200 million pay package.

Grasso accused Spitzer in a Tuesday Wall Street Journal op-ed article of jumping into the pay dispute for his own personal gain. The lawsuit "smacks of politics" and "makes clear that Mr. Spitzer is running for governor [in 2006] and running hard," Grasso wrote.

Some on Wall Street predict that Spitzer's high-profile crusade against corporate malfeasance will end up much like the one spearheaded by Rudolph W. Giuliani in the late 1980s. Giuliani used his crime-fighting credentials to win the New York City mayoral race, but a number of his biggest cases were dismissed or reversed on appeal.

But Spitzer's friends, as well as some more neutral legal observers, say the attorney general's office has a history of picking cases that make imaginative, but legally supportable, use of New York's unusually strong anti-fraud laws. And the 44-year-old Manhattanite said he is comfortable -- no, relishing -- taking on Grasso. "I like it when people push back. It's what I would do," he said, eagerly ticking off what he believes is his strongest evidence against Grasso. "I'm ready for a good fight."

After all, critics have underestimated him before. When Spitzer first ran for office, he was dismissed as a political neophyte who was trying to buy his way into office with his real estate developer father's money. He won his first victory in 1998 by such a narrow margin that the recount took six weeks.

In his early days, Spitzer was the quiet guy, the researcher, the staffer, the policy wonk. Now he is highly visible, lobbing well-crafted cases into voids he believes have been left by federal regulators. "If you guys aren't doing it, I will," he said in a recent interview.

"Many people are surprised by how much of a leader he has been, that he would make so much headway" said Ellen C. Yaroshefsky, director of the ethics center at Yeshiva University's Benjamin N. Cardozo Law School. "Eliot Spitzer is using his public persona in a positive way."

That is not a universal sentiment. Many on Wall Street share Grasso's critical view of Spitzer, though most won't talk on the record for fear of becoming one of Spitzer's targets. They see him as a meddler poking into issues best left to federal regulators and as a rabble-rousing populist.

Kathryn S. Wylde, who heads the New York City Partnership and Chamber of Commerce, offers a temperate version of some of the criticism, saying, "On the one hand, everybody respects that the attorney general filled a vacuum and cleaned up a series of abuses left over from the boom period of the late 1990s . . . but there's an exhaustion factor that comes into play. . . . Every day it's a new issue."

Spitzer's first brush with high-profile investigations came at the Manhattan district attorney's office, where he worked from 1986 to 1992. Longtime district attorney Robert M. Morgenthau was moving against organized crime, and Spitzer wanted to go after the trucking firms that served the garment district.

"Eliot was the star, and he was the star from the beginning," said Michael G. Cherkasky, who picked Spitzer for the racketeering bureau. "He's smart and innovative and he gets along with people. Nobody carries Eliot's bag."

Spitzer persuaded Cherkasky to set up a fake sewing shop to lure Mafia extortionists. The prosecutors then came up with a novel use of antitrust laws to indict two Gambino family members. But three weeks into their trial, Spitzer and Morgenthau agreed to an unusual deal: The defendants pleaded guilty, paid a $12 million fine and got out of the local trucking business. In return, they avoided prison. Using the law to change an industry's structure would become another Spitzer hallmark.

"We might have gotten a bigger headline if we had sent them away for a long time, but his goal was a consent decree to change the industry," said Robert A. Mass, who worked with him on the case. In 1992, Spitzer left the district attorney's office for private practice. Although it was clear that he was looking for a way back into public service, he surprised many by leaping into the 1994 Democratic primary for state attorney general. He poured more than $4 million of his own money into the race but came in last among four candidates.

Spitzer spent the next four years practicing law and showing up at political gatherings from Buffalo to Staten Island. He wore the same increasingly worn-out dress shoes to everything. This time he won the Democratic primary and defeated Republican incumbent Dennis C. Vacco in a vicious campaign in which Vacco attacked Spitzer's wealth and Spitzer went after him for cronyism. When the recount was over, Spitzer celebrated by buying a new pair of shoes.

Born privileged, Spitzer grew up in Riverdale, an aspiring northern corner of the Bronx. He attended an elite private school, then Princeton University and Harvard Law School. His father, developer Bernard Spitzer, was a self-made man, the son of Jewish immigrants who grew up in a cold-water apartment and put himself through school. He and his wife, Anne, an English literature professor, instilled in their three children both respect for the American system that allowed such a rise and the desire to improve it.

While at Harvard, he worked for law professor Alan M. Dershowitz, who describes Spitzer as "the quiet one, the behind-the-scenes guy, the library guy. It's amazing how he's blossomed."

Now Spitzer is an accomplished public speaker who leavens his thirst for intellectual combat with a self-deprecating sense of humor. He'll quote Homer Simpson and Daniel Patrick Moynihan minutes apart in the same speech. His Manhattan office is filled with photographs. Dozens feature his wife, Silda Wall, a former law school classmate, and their three daughters, and Spitzer says he is intrigued by what his visitors say about the others. Many ask about the courtroom sketch of him during the Gambino trial. Others notice Teddy Roosevelt, the New York-born president famous for busting corporate monopolies. But almost no one from Manhattan recognizes NASCAR driver Jeff Gordon, whom Spitzer met through his brother-in-law.

Spitzer has drawn criticism from some who find the combination of open political ambition and high-profile cases unseemly. "He runs the risk of undermining the credibility of the office," said Spitzer's predecessor Vacco. "He needs to be concerned that he doesn't appear to be more concerned about the headlines than the results."

As an elected official, Spitzer has gotten plenty of coverage. He went after expensive restaurants that hired only male waiters, released a study showing New York City police's street crimes unit had disproportionately stopped minorities, and sued Midwestern power plants over emissions that cause acid rain.

That 1999 lawsuit was his first big venture onto federal turf and it irked some U.S. Environment Protection Agency staffers. "We were working on it, trying to do things strategically. Eliot became impatient," then-EPA chief Carol M. Browner said recently.

But Browner said she remains a Spitzer fan -- "I like his energy" -- and sees the incident as typical of the difference between elected politicians and appointed regulators who must be careful to take a balanced approach. "Once he has decided, 'Here's an evil, here's an injustice,' it's 'What are we doing, why are we waiting?' " she said.

Despite those lawsuits and a well-publicized battle with the American Red Cross over fundraising for victims of the Sept. 11, 2001, terror attacks, Spitzer didn't become a national figure until he took on Wall Street in April 2002.

In hindsight, Spitzer's decision to go after biased investment banking research seems easy. But when he and his staff tried to recruit supporters to attend his press conference announcing a case against Merrill Lynch & Co., no important elected or regulatory official would join him. For one dark moment, Spitzer had second thoughts. He said in a recent interview that he found himself wondering, "Am I Don Quixote tilting at windmills? . . . I'm always worried we won't be right, so we have to be careful."

Wall Street reacted savagely. But Spitzer was armed with the Martin Act, one of the broadest state securities laws in the nation. It allowed him to go after the banks even if he couldn't prove they knew they were doing something illegal. Within months, Spitzer had rounded up the SEC, a dozen other state regulators and 10 of Wall Street's largest banks into an enormous $1.4 billion "global" settlement.

"If Eliot thinks that he is right about something, he will stand up to anyone and not back off. He can be reasoned with, but you better have reason on your side, and not simply bluster," said Goldman Sachs Group general counsel Gregory K. Palm, one of the lead negotiators.

In September, Spitzer revealed widespread trading abuses in the mutual fund industry and began filing criminal charges. So far, the industry has given up more than $2.3 billion in restitution, penalties and reduced fees for customers.

Some fund executives say he is promoting unfair populist attacks on an industry that generates wealth for millions of Americans.

Spitzer said he has nothing against companies that make money, as long as they don't rip off ordinary people. "The issues we've raised clearly have a populist air to them because they're designed to guarantee that there is equity and fairness, regardless of who you are -- the small investor, the low-wage worker. But the resolutions aren't designed to tear down the institutions. The effort was to make them work properly."

Defense lawyers, meanwhile, see him as a guerrilla regulator, who unfairly targets common practices, comes down hard on a few unlucky souls and then moves on. "It is ridiculous to charge people who had no idea whether market timing was wrong with securities fraud," said Edward J.M. Little, a former federal prosecutor who has clients caught up in the probe. "Market timing. Please. That's not the same as insider trading."

Spitzer said his aim isn't to pursue every case but "to be a catalyst, to get the national entities to focus on the issue."

And SEC enforcement director Stephen M. Cutler said Spitzer slogged through the year-long battle to clean up research. "The safest thing for him to have done would have been to move on" after bringing the Merrill case, Cutler said. "The fact that he didn't showed that he was genuinely committed to this issue."

Then there's the question of Spitzer's long-term plans. Of course he is considering the governor's race in 2006, when both his and Republican Gov. George E. Pataki's terms end, he said, but in the meantime there are insurance brokers, pharmaceutical companies and employment agencies to investigate.

Wall, his wife, who founded a children's charity, bristles at descriptions she reads of her husband. "I don't know why they call him ambitious and aggressive," she said. "He's a person of action, someone who was brought up, as I was, to believe that if there is a problem, it is ultimately up to you to do something about it."

But Spitzer is more relaxed. "If you're working hard to succeed, what's wrong with being ambitious?" he said.

Eliot L. Spitzer's high-profile crusade against corporate malfeasance faces a test in court.Eliot L. Spitzer uses a chart to discuss his suit against former New York Stock Exchange chief Dick Grasso.