While watching "Princess Mononoke," a landmark feat of Japanese animation from the acknowledged master of the genre, it's very easy to understand the film's phenomenal popularity. Outdone only by "Titanic" as Japan's box-office champ, this intricate, epic fable is amazing to behold. No wonder the filmmaker, Hayao Miyazaki, is acknowledged as an inspiration among his American counterparts.

"Not a day goes by that I do not utilize the tools learned from studying his films," John Lasseter ("Toy Story," "A Bug's Life") has said. Barry Cook and Tony Bancroft, whose "Mulan" shows strong evidence of Mr. Miyazaki's influence, are on the record with "Miyazaki is like a god to us."

This exotically beautiful action film features gods and demons locked in a struggle for the future of the unspoiled forest and an elaborate moral universe that Mr. Miyazaki has created. Frequent battle scenes keep the story in motion. These are often breathtakingly rendered, but it is the film's stirring use of nature, myth and history that make it so special.

The events of "Princess Mononoke" begin with an attack on a remote mountain village. A demonic wild boar, drawn as a furious tangle of pulsating wormlike strands and given the movements of a huge, terrifying spider, is the reason the young hero Ashitaka goes off to save the forests.

Those forests, imbued with a stirring, forthright sense of natural beauty, turn out to be filled with Mr. Miyazaki's fanciful inventions. The film is worth seeing just for the sight of its Forest Spirit, which takes animal-like form by day and roams the nights as a diaphanous Godzilla-like divinity with magical powers. The image of plants and flowers springing to life beneath the Forest Spirit's hooves as he walks is simple, meaningful and ravishingly presented.

The film features a superb blend of hand-drawn cels and fluid computer- generated motion, but its look is also gratifyingly understated. And in welcome contrast to the chest-thumping animated musical, this film uses the grandeur of its score (by Joe Hisaishi) gracefully to enhance the momentousness of its story. Individual scenes are most intriguing for their rich variety in a film whose human characters (ironworkers, lepers, hunters, former prostitutes and Princess Mononoke, a feral young woman reared by wolves) are as varied as the woodland fauna.

"Princess Mononoke," which is being released by Miramax, has been effectively translated (by Neil Gaiman) and dubbed into casual Americanese without losing its Japanese essence. Billy Crudup, Claire Danes, Billy Bob Thornton, Gillian Anderson, Minnie Driver and Jada Pinkett-Smith all give vocal performances that suit the vibrant images on screen.