It’s a rare film that can take the conventions of an established genre and elevate them to the level of art, but that’s what Ang Lee’s coolly elegant, slyly humorous and visually breathtaking kung-fu actioner manages to do. “Crouching Tiger, Hidden Dragon” weds a mythology as elaborate as that which George Lucas concocted for the “Star Wars” trilogy (though not nearly so explicit) with martial arts moves even more magical than those in “The Matrix,” all at the service of a scenario brimming with the tropes of melodrama–most notably the omnipresent oriental theme of the disciple out to avenge the murder of his mentor, but also a long-suppressed romance between two adventurers, the training of an extraordinary young fighter by a figure who turns out to be villainous, and a desert romance between a brigand and a headstrong princess anxious to escape the confines of an arranged marriage (among other subplots). The outcome is occasionally confused from a purely narrative perspective, but it’s staged with such verve and has been so beautifully photographed that even its absurdities prove exhilarating.

Set in nineteenth-century China, the plot begins with the intended retirement of Master Li Mu Bai (Chow Yun-Fat), who hands over his sword, the legendary Green Destiny, to his long-time comrade-in-arms Yu Shu Lien (Michelle Yeoh) even though he has never succeeded in tracking down the murderer of his master, an evil thief known as the Jade Fox. Shu Lien, who has secretly loved Master Li for years, delivers the weapon to Sir Te (Lung Sihung) in Peking, where she also meets the lovely Jen (Zhang Ziyi), the daughter of a recently-installed governor who chafes at the thought of marrying a man selected by her father for political reasons; the girl actually pines, we learn, for Lo (Chang Chen), a bandit who once kidnapped her but eventually won her over in captivity (the allusion to Rudolph Valentino as “The Sheik” is hardly accidental). Matters get complicated when the Green Destiny is stolen by a ninja-like figure whose martial skills prove the equal of Shu Lien’s; as it turns out, the intruder has been trained by none other than the Jade Fox, whose re-emergence brings Master Li back into the arena for a showdown with both his nemesis and the dangerous new protege.

It wouldn’t be fair to be too explicit about the further twists that the plot takes in working out the interrelationships among the characters, even though most are commonplaces within the genre. Suffice it to say that a battery of three writers, working from a novel by Wang Du Lu, bring all the threads together into a reasonably coherent whole (despite occasional longueurs and a refusal even to attempt an explanation of the special powers enjoyed by the heroes), and also manage to suggest the sort of mystical underpinnings that Lucas brought to the space-age shenanigans of his faraway galaxy. Even better, they provide periodic opportunities for elaborate action set-pieces which Lee (along with fight choreographer Yuen Wo-Ping, who devised the astonishing fisticuff moments of “The Matrix”) renders so spectacularly that they amaze again and again. The series begins with a wondrous nighttime battle between Shu Lien and the Jade Fox’s masked disciple in the streets (and across the rooftops) of Peking, and continues through a skirmish involving Master Li, the Fox, the ninja, a policeman and the latter’s daughter in a city square; a comic, almost Jackie Chan-ish sequence in which the Fox’s pupil nonchalantly demolishes an inn full of rough-and-ready fighters; and an extended match between the disciple and Shu Lien employing a wide assortment of weaponry. With a canny sense of timing, however, the filmmakers save the best for last: the final confrontation between Master Li and the Fox’s student, literally an airborne event staged partially on the branches of windswept trees, is so staggeringly inventive that you’ll find yourself chuckling with delight and wanting to applaud before it’s over.

All of this is inherently ridiculous, of course, but the makers invest it with such style, grace and welcome spurts of humor (as well as some real emotional resonance) that it takes on an almost transcendent quality despite its absurdity–in much the same way that “E.T.” did in an equally cliched genre. Lee, rebounding from last year’s muddled Civil War drama “Run With the Devil,” must naturally be given the primary credit. (He certainly proves himself one of the most versatile directors working today: to pull off something like this after the serene precision of 1995’s “Sense and Sensibility” and the detached brilliance of 1997’s “The Ice Storm” is really remarkable.) But Lee couldn’t have done it without a marvelous cast. Chow endows Master Li with the same mixture of gravity and bemusement that Sir Alec Guinness brought to Obi Wan Kenobi; he may not have as much screen time as his co-stars, but his presence is the glue that holds everything together. Yeoh is equally fine; she captures beautifully the emotional depths behind the placid exterior of Shu Lien, giving her culminating scenes with Chow surprising power. Zhang Ziyi is a real find as the clever, resourceful Jen–a beautiful girl able to hold her own against both Chow and Yeoh. The other performers have far less to do, but mention should be made of Chen’s energetic, hirsute highwayman and Cheng Pei-pei’s calculating governess. Lung Sihung steals a couple of scenes as an official acutely aware of protocol and diplomatic niceties.

In the final analysis, “Crouching Tiger, Hidden Dragon” is really nothing more than a compendium of outrageous cliches that, lumped together as they are here, should make for an undeniably silly whole. But Lee and his cohorts serve them up with such relish and aplomb that the result is enchanting and irresistible. If there’s such a thing as inspired silliness, this picture surely embodies it.