If Joachin Phoenix is serious about retiring from acting, he couldn’t have chosen a better swansong than this small but affecting drama, in which he gives his best performance ever (and yes, I include his fine impersonation of Johnny Cash in “Walk the Line”). “Two Lovers” also happens to be the best film yet from director James Gray, with whom Phoenix has worked before in two disappointing pictures (“The Yards” and “We Own the Night”), both undistinguished, old-fashioned crime stories. This film is old-fashioned, too—it actually hearkens back to scripts of the 1950s by the likes of Paddy Chayefsky—but in this case it seems a fresh take on familiar themes rather than a contrived retread.

Phoenix plays Leonard Kraditor, a sad young man who’s suicidal after diagnosis with a medical condition and the breakup of his engagement. He works in the family dry cleaning store in Brighton Beach, which his father Reuben (Moni Monoshov) is negotiating to sell to friendly competitor Michael Cohen (Bob Ari). Reuben and Cohen are also interested in acting as matchmakers between Leonard and Cohen’s daughter Sandra (Vinessa Shaw), with surprising success.

That relationship is quickly undermined, however, by Leonard’s infatuation with a new neighbor, Michelle (Gwyneth Paltrow), a beautiful but troubled young woman who’s being kept by wealthy married lawyer Ronald Blatt (Elias Koteas). While stringing Sandra along, Leonard increasingly pursues Michelle, hoping that by becoming her chief support and confidante he’ll be able to break up the affair with Blatt and convince her to run off with him. He actually comes very near to succeeding, but ultimately Michelle’s emotional fragility derails his plan.

“Two Lovers” is obviously a romantic triangle, but one in which only the man is aware that it’s a triangle at all. That puts most of the burden of making the script by Gray and Richard Menello work squarely on the shoulders of Phoenix, who proves more than capable of carrying it. Though it’s a bit hard to believe that the two women would fall so quickly into Leonard’s arms (and bed), Phoenix gives the character so many layers, shifting effortlessly from one mood to another and projecting curious confidence one moment and pathetic vulnerability the next, that he makes him credible. At some points he actually resembles the young, mercurial Brando, and one can’t imagine a higher compliment than that.

The actresses haven’t the same degree of possibilities, but both are excellent, with Paltrow cannily conveying Michelle’s Siren-like persona and neediness and Shaw Sandra’s more sensible but equally needy character. Excellent supporting turns are provided by Monoshov as Leonard’s concerned father and Koteas as Michelle’s smooth but undependable paramour, and Isabella Rossellini delivers a particularly affecting performance as Leonard’s sad-faced but supportive mother. The lesser roles are expertly filled as well.

And Gray handles everything with a touch that doesn’t push too hard, imbuing what might have been melodramatic moments with a naturalness that’s quietly effective. The technical side of the picture is equally unfussy, with Joaquin Baca-Asay’s camera making fine use of the New York locations.

“Two Lovers” is the sort of small film that’s especially welcome in these days of overblown blockbusters. A deceptively simple but emotionally rich tale of a man torn between two very different kinds of women, it has many of the fine qualities of last year’s “Frozen River”—including a remarkable lead performance. Like that picture, it deserves a much larger audience than the one it will probably find. But wise viewers will search it out, and if they accept it on its modest, unassuming terms, they’ll be amply rewarded.