At the soda fountain in Diamond Drugs, Stanley D. Mullineaux sips his Coke and remembers a simpler, slower Gaithersburg. As the former town barber who has lived there all his life, Mullineaux, 52, once knew everyone in the sleepy hamlet where Chessie freight trains still pass through an old-fashioned red-brick railroad station.

A few miles up the road, Vickie York drives a black Nissan 300ZX to her town house near Montgomery Village, an enclave of newly built homes set on perfectly manicured lawns surrounding man-made Lake Whetstone. She is one of the thousands of young professionals who have moved to upper Montgomery County in the past several years, attracted by the high-tech companies that line nearby I-270.

The history of Gaithersburg is a tale of how Mullineaux and York live side by side. It is a story of how one of the fastest-growing communities on the East Coast preserves its small-town flavor. It is a story of a community in transition.

No city more than Gaithersburg, nestled in the geographical heart of Montgomery County north of Rockville, represents the forces of rapid development fueling the construction of thousands of new town houses and office buildings in the county during the past few years. One sign of the times is the Gaithersburg Monopoly game that is gradually replacing the "Where the heck is Gaithersburg?" T-shirts that once were touted around town.

"Everyone at this point knows where Gaithersburg is," said William Schlossenberg, 38, president of the Gaithersburg and Upper Montgomery Chamber of Commerce. "When those T-shirts came out, this was really farmland. Now it's high-tech."

Gaithersburg's burgeoning development has its costs. If you ask Mullineaux how the city has changed in the last 40 years, the softspoken man who remembers standing in line near the corner drug store at Diamond and Summit avenues to get his five-pound ration of sugar during World War II, answers succinctly. "Traffic," he says. "It's unreal."

The downside of Gaithersburg's rapid development is that it has crowded the area's schools and outstripped county and state construction of new roads and road improvements, causing unprecedented traffic jams.

"People are flocking to the area to live," said Schlossenberg. "And we're having problems keeping up with the demands. The costs of funding road and school projects are being borne by residents."

As the once-sleepy farming community has shifted gears to booming suburb, Gaithersburg's city population has soared from about 3,000 in 1960 to 30,000. An additional 42,300 people live in the surrounding area. The number of houses in the Gaithersburg area has climbed from 18,315 to 27,252 in the past decade, according to the Montgomery County Planning Board.

The number of jobs in the area created by firms attracted to the I-270 corridor, such as International Business Machines, Kodak, Hewlett-Packard Co. and Bechtel Power Corp., has skyrocketed from an estimated 29,700 to 53,000, the board said. The number of jobs is expected to climb to 58,600 by this summer.

Lying 12 miles from the northwestern border of the District, Gaithersburg is about 18 miles northwest of the Capitol. The Metro subway's Red Line was extended to Shady Grove two years ago, and brings riders within one mile south of Gaithersburg city limits on Rte. 355. Amtrak passenger trains, the Chessie (formerly Baltimore and Ohio) passenger service and a six-day-a-week commuter train also serve the area.

York, a 30-year-old real estate sales manager, said it takes her about 25 minutes to drive into the District during off-hours, and about 45 to 60 minutes during rush hour.

Gaithersburg became a city in 1878, and was named after Benjamin Gaither, who, in 1802, built his home near a forest oak in a tiny settlement at the crossroads of two traditional Indian paths -- crossings that now have been replaced by super highways.Its early history was closely tied to the growth of agriculture in the county and the development of the railroad.

Popular folklore has it that George Washington rested in the shade of the 280-year-old forest oak, which now serves as Gaithersburg's city logo. Every September the city celebrates its origins with Olde Town Day -- a festival of the arts and crafts practiced by the original settlers, such as rug hooking, quilting, weaving and spinning.

"I remember distinctly never being able to buy a pair of shoes in Gaithersburg," said W. Edward Bohrer Jr., 45, who has lived there all his life and recently was elected mayor. "You were forced to go to Rockville, Bethesda or Silver Spring."

With the influx of new residents and homes came about 10 shopping centers and a giant new shopping mall, the Lakeforest Regional Shopping Mall, which is located on the edge of Montgomery Village with 153 stores, including J. C. Penney's and trendy Benetton.

A drive through greater Gaithersburg is a study in contrasts between the old and the new, the rural and the urban. Juxtaposed against high-rise buildings are dairy farms, cows grazing on rolling green meadows, white-washed fences, simple farmhouses and miles of wheat and corn fields dotting the bucolic countryside. The county fair held in Gaithersburg is the largest such fair on the Eastern seaboard.

Reflecting the small-town charm of Olde Towne Gaithersburg, the city government -- a city manager and five-member council with a $9.7 million budget -- operates out of the late Edward P. Schwartz's rambling white Victorian house surrounded by peony gardens. The old downtown area still has a Ben Franklin five-and-dime store, corner soda fountain and a smattering of antique shops.

"It gives you the feeling of a home-town community," said York, who moved to the area from Indiana about 10 years ago. "The neighbors, who have lived there for years and years, all know each other."

Not far from Olde Towne and the fair grounds, in green pastureland surrounding the Shady Grove Adventist Hospital at the intersection of Rte. 28 and Shady Grove Road, is the site of the widely acclaimed Shady Grove Life Sciences Center. The campus-like center -- a 300-acre parcel of land that will include biomedical companies and health-care facilities -- is owned by the county and expected to be completed in about 10 years.

The life sciences center will cater to the score of biotech companies attracted to Gaithersburg because it is near such federal agencies as the National Institutes of Health, the Food and Drug Administration and the Naval Medical Center in Bethesda.

"This is the only industrial and technology park focused on the biotechnology and life sciences," says Duc Duong, assistant director of the Montgomery County Office of Economic Development. About $75 million in government and state funds has been spent on the project, and it is expected to cost another $175 million.

The Shady Grove area promises to become one of the busiest corridors in the county with millions of square feet of office space being built and thousands of jobs becoming available, county officials say. The University of Maryland plans to build a 35-acre research facility and locate part of its technology institute near the center.

Teaming up with industry and government, the Center for Advanced Research and Biotechnology is a joint project of the university, the county and the National Bureau of Standards, also located in Gaithersburg. Johns Hopkins University also is planning a Center for Advanced Studies in science and technology in the same complex. Construction will soon begin near these centers on the $600 million, 211-acre Washingtonian Center, which will include office buildings, restaurants, a hotel and residential buildings.

"Education and income levels are already rising as a result of the new facilities," said Jon Gerson, executive director of the Chamber of Commerce.

The contrast between Gaithersburg's old and new is captured by the variety of housing in the area. East of the high-tech corridor are the town houses, apartments and detached homes of the sprawling 26,000-resident Montgomery Village built by a prominent local developer, Kettler Brothers Inc. It is a planned new town with four parks, three community centers, mall and movie theater, five outdoor swimming pools, lakes and fishing ponds.

Only a few miles south are large, Victorian-style houses set along tree-lined sidewalks in Olde Towne. Even more unusual set against the backdrop of new town houses developed by Kettler and Ryan Homes, is the community of Washington Grove -- or "The Grove" -- as residents there call it. The forested area checkered with narrow footpaths and eccletic-style houses built close together at the eastern edge of Gaithersburg ring a common green that was formerly the site of a Methodist tent camp in the 1870s.

Gaithersburg home styles range from condominiums to Victorian, from contemporary models to traditional. Prices for detached homes start at about $80,000 to $85,000 and exceed $130,000 in some neighborhoods, according to city officials. Prices for town houses start at about $65,000 to $70,000 and exceed $100,000 in some neighborhoods. Five hotels are in the area, with two more expected to be completed by early next year.

"People out here have the best of both worlds," said Schlossenberg. "They're close enough to D.C. to take advantage of what the city offers. At the same time they get the green space and the open fields."