HELL SWITCHES places with Earth in the Pyrenees in 1944. Franco's fascist army is clearing out a band of guerrillas, with all of the usual brutality of an armed force fighting an insurgency. That's the outer story. The inner story of Guillermo del Toro's overwhelming Pan's Labyrinth inverts the myth of Proserpine. A daydreaming 10-year-old, Ofelia (Ivana Baquero), may be the reincarnation of the princess of the Underworld, but she is currently helpless in the realm of her wicked stepfather. The stepfather, the citified Capt. Vidal (Sergi López), arrives to meet his troops deep in the forest with his ailing, pregnant wife, Carmen (Ariadna Gil). Vidal is an emblem of the fascism that an audience loves to hate, from his spotless pearl-gray uniform to the malevolent shine of his leather gloves and boots.

Actors can't always develop a style for fantasy. And sometimes they let the costumes and makeup lead them into camp. López evinces far more than just the cruelty of the uniform. Vain and flashing-eyed, he sums up the neurotic, fearful side of machismo.

In a key detail, Vidal cherishes a pocket watch that is obviously more than just a timepiece to him. Del Toro's aversion for mainsprings, dials and keys serves as a motif in all his films, from the poisonous mechanical scarab in Kronos to the clockwork assassin in Hellboy.

Del Toro sets Vidal against Expressionist shadows. His private quarters are in the top room of an old mill. The mammoth-toothed gear of the mill wheel looms behind the officer's desk. Here is a fantasy of mechanical fascism, broken down in the woods. If it weren't for the ancient stone labyrinth just outside the camp that beckons Ofelia, the title could be a poetic reference to the thick groves of trees on all sides of Vidal's barracks.

As in Blue Velvet, insect life abounds. As she rides into the camp, Ofelia notes a stick insect emerging from a weathered statue of Pan. Later, she receives a visit from the demigod himself (Doug Jones), a shambling faun, whose limbs creak like wooden joints. Describing him later, Ofelia says, "He is very old, very tall, and he smells of earth." His moonstone eyes glitter under a massive brow. Asked who he is, Pan replies, with Cocteau's own elegance, "I've had so many names, names that only the wind and the trees can pronounce." The creature gives Ofelia three tasks to prove that this lost princess has not been contaminated by the world of the mortals. If she succeeds, she can return to her kingdom and wander "the seven circular gardens of your palace."

First, Ofelia must slay of a voracious toad with poisonous exhalations. Second, she must retrieve a dagger from an ogre's larder. The third task may require a larger sacrifice of her humanity than Ofelia can make.

Re-creations of classical art can look like kitsch in a film, but del Toro has enough ideas of his own to be able to quote Goya's "black paintings," paying a shocking homage to Saturn Devouring His Son. Del Toro can make these quotes because he has originality to spare. Clicking, buzzing fairies fly through the film—Pan hand-feeds one a chunk of raw meat. But this is a movie in which fairies are waved away, as if they were wasps.

Del Toro appropriates a standard Catholic holy card image of the martyred St. Lucia, who carried her eyeballs on a plate; that's where the ogre keeps his orbs, reaching for them with scrabbling hands before he can pursue Ofelia. He has frescoes around his dining hall, commemorating the meals he's made of children. His jowls are bloodstained, and his sagging flesh makes him look like a shelled tortoise. "He's not human," Pan says, silkily.

Indeed, del Toro never loses sight of the human scale, despite these excursions to the next world. He even expresses some grim mirth at the pomp of the military. Del Toro cranes the camera up to see the explosive popping of umbrellas over the door of an arriving car. Vidal and his flunkies are desperate to make sure that no tiny splash of water hits his guests' clothes. And there's something here that's as real as a memory of combat: a dying man, semiconscious, wards off his executioner, waving away the barrel of an enemy pistol with a nerveless hand—once, twice, thrice.

Del Toro can be electrifyingly violent, yet we sense a gentle artist who, like Goya, steels himself to look at horror. Even more bewitching than the marvelous bestiary del Toro releases is his color palette; instead of the milk-blue hues of the ordinary CGI fantasy, here the woods hover in a constant lowering twilight.

Pan's Labyrinth is the most satisfying kind of fairy tale, featuring a conflict between the brutality of the male order and a moon-world of enchantment in which women are the warriors. Ofelia protects her mother and Mercedes (Maribel Verdú), the brave housekeeper. And there are the archetypes: maiden, mother and wise woman.

Speaking of the law of threes, the artistic successes of Cuarón, Iñárritu and del Toro have been the source of much comment in the United States about the rise of Mexican cinema. The list goes on, though; there are more Mexican filmmakers proving the rule every day. Can we say, instead, that the power of Mexican art was there all along, and now we are at last becoming wise enough to recognize it and love it?

Pan's Labyrinth (R; 112 min.), directed and written by Guillermo del Toro, photographed by Guillermo Navarro and starring Ivana Baquero, Adriana Gil, Sergi López and Doug Jones, opens Jan. 12.

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