Norton's Derek Vinyard isn't anywhere around when his younger brother, Danny (Edward Furlong, who excels at the troubled-adolescent roles Sal Mineo once played), faces suspension from high school for writing an admiring paper on Mein Kampf. But the principal (Avery Brooks), Derek's own former teacher, recognizes the older sibling's influence.

After the brothers' fireman dad was killed at random in a black neighborhood, Derek bulked up and became the ardent disciple of a radical-right hatemonger (Stacy Keach in a small but effective role). He started organizing the other disaffected, impoverished white kids in his Venice Beach neighborhood into a tight-knit clan of skinheads. And when Derek caught two black thieves trying to steal his car, he doled out a sentence. He gunned down one and "curbed" the other--made the thief lie face down and open-mouthed on a curb, so his teeth grated on the concrete. Then Derek stomped the back of his head.

Instead of punishing Danny, the principal proposes an alternative--a personally supervised history class called "American History X." The first assignment: Write about Derek and the influence he's had upon Danny's life. That sounds easy, since Derek is getting out of jail for the two killings that day. But after his eye-opening prison stay, the newly released Derek isn't the same person who relished beating blacks and destroying ethnic groceries.

For American History X to work, both as drama and as social commentary, the actor playing Derek must convince us of his anger and ruthlessness before prison. Yet he must also show us a human being underneath all that hate and bluster, or his eventual change of character won't wash. Edward Norton does both brilliantly. Viewers who remember him as the lovesick Jimmy Stewart-ish beanpole in Everyone Says I Love You will be shocked by his transformation here into a ticking bomb. But they shouldn't be. Norton doesn't disappear into a role; rather, he fills it with so much alertness, physical detail, and urgency that he and the character fuse.

The flashback structure allows Norton to play Derek at varying stages. As Derek buys into white power, Norton tightens his gestures and posture, and the effect is like watching a snapshot develop into a hardened image. Nowhere is this clearer than in the contrast between the stooped, crying kid who lashes out at his father's killers and the muscular tough who stalks chin and chest first onto a neighborhood basketball court. Norton's performance is rich in these and much smaller details--the different way he handles a gun before and after prison, for example, or the regretful look he gives himself in a mirror, using a hand to hide his swastika-ed heart.

In its sincere, muckraking tone, American History X resembles one of Stanley Kramer's problem dramas from the 1950s and '60s--especially Pressure Point, in which psychiatrist Sidney Poitier tries to find out what motivates a rabid Nazi (Bobby Darin!). The screenwriter, David McKenna, makes a good, honest stab at addressing the roots of hate crime, something the recent Apt Pupil fumbled miserably. He details how the Vinyards learned bigotry at the kitchen table, and he demonstrates how fear, poverty, and neglect spawn racism of all kinds. Here, as elsewhere, Norton's performance adds verisimilitude: It's startling to hear him espouse white supremacy as forcefully as he defended the First Amendment in The People Vs. Larry Flynt.

Needless to say, this isn't material that needs to be hyped up for shock value. Unfortunately, that doesn't stop the director, Tony Kaye, who also photographed--a bad combination. American History X made headlines recently when Kaye engaged in a bitter fight with New Line Studios over the final cut. Kaye tried to remove his name from the film, and the Director's Guild refused; the director is now suing, claiming that Norton (who coproduced) recut the film himself to make his part bigger.

It's nearly impossible to determine who was responsible for what. But if Kaye gets credit for the handsome black-and-white camerawork that separates past from present, he also gets the blame for the many artsy flourishes that corrupt everything they touch. The hero takes one of those purifying slow-motion showers that benefits nobody but Culligan, and anytime we're meant to be suitably horrified, the film drops to half-speed and slathers on the opera music. (Anne Dudley's bombastic score constitutes an assault in itself.)

Worst of all is a garishly filmed skinhead riot in an ethnic grocery. As the looters pour milk over a terrified cashier's head (to make her white), the scene goes on for such a prettily photographed eternity that our anger shifts from the skins to the director. This sort of aestheticized brutality is no small matter: It exploits and falsifies the vicious acts it condemns. If Norton indeed OK'd the final cut, he deserves blame for not leaving this crap on the cutting-room floor.

Especially since the most telling moments in American History X are the least rabid. McKenna gives Derek several provocative speeches that blur the line where conservatism ends and fascism begins: When he talks about why Rodney King deserved his beating, or why people need to clear the undesirables from their neighborhoods, lots of viewers will likely agree--to a point. It's how far along we're willing to go that makes the movie so compelling. We can sit and watch Nazi goons beat an Hispanic clerk and never feel the slightest pang of recognition. But when the same goons lower their voices and start talking about personal responsibility, and safe streets, and protecting jobs, the movie hits home with a vengeance.