I spent last fall living in Venice, which is less an ordinary city than a fantasy of bridges, domes, water, and light that has barely changed (in appearance, at least) since its glory days almost 500 years ago. Sarah Dunant's new historical novel, IN THE COMPANY OF THE COURTESAN, is set mostly in this cryptic and magical place, and reading it, for me, was a little like going back.

But the book is not strong on atmosphere alone. It left me quite convinced that every would-be historical novelist should first take a course in thriller-writing. Dunant's exceptionally intelligent, literate, sexy suspense novels preceded her forays into historical fiction, and the discipline of creating a swiftly moving narrative that develops and resolves on several levels seems to have carried over. Too many contributions to this newly trendy genre seem devoid of tension while bloated with the sort of period detail that serves to show off the writer's copious research rather than to advance the story. In contrast, THE BIRTH OF VENUS --- Dunant's first historical novel, set in 15th-century Florence --- and now IN THE COMPANY OF THE COURTESAN are lean, psychologically acute, richly imagined tales that evoke the Italian past with beauty and power.

The title makes this book sound like a bodice-ripper, but although there is noticeable erotic content --- the novel is an insider view of the business of high-end prostitution --- it is never gratuitous, and there is little romance in the conventional sense of the word. In fact, it really should have been called IN THE COMPANY OF THE DWARF, because the narrator (and the heart of the novel) is Bucino, a man brilliant in mind and afflicted in body, rather than the 21-year-old courtesan, Fiammetta Bianchini, whom he serves.

The story begins in Rome, where invading soldiers and Protestants (it is the dawn of the Reformation) are sacking the city; thanks to Fiammetta's wit and boldness, she and her dwarfish companion escape with their lives --- and a few large jewels --- to her birthplace, Venice. There they rebuild her "practice" with the help of the writer and sometime pornographer Pietro Aretino and a mysterious blind healer known as La Draga. The enterprise is threatened by Bucino's near-fatal illness, Fiammetta's unwise infatuation with a noble youth, and La Draga's unsuspected secret life --- but IN THE COMPANY OF THE COURTESAN, though it makes compelling reading, is not driven by events so much as by ideas (what a concept!) and characters, all of whom are outsiders (and I'm not even counting the Turk and the Jewish convert whom Bucino befriends: Venice, then and now, is nothing if not cosmopolitan).

I don't mean to make IN THE COMPANY OF THE COURTESAN sound like hard going (it isn't), but it has real substance. Bucino's observations are often philosophical, sometimes sour, always smart. Here he is on the omnipresence of lust: "If there were not so many rules to hinder them, I think that men would look at women all the time. Once there is food enough in one's stomach what else is there to do in life?" His account of the courtesan as a sort of Renaissance entrepreneur shows Fiammetta's work (and his, as the watchdog, errand boy, entertainer, and financial manager of her household) to be a fascinating mix of theatricality and psychology. "Like most good courtesans," he writes, "she is adept at living with two sets of feelings: the ones she has and the ones she pretends to have to humour her clients. In this way she is often interested when she is bored, sweet when she is peeved, funny when she is sad and always ready to pull back the sheets to play when what she would most like to do is sleep alone in them." Trained to please others, Fiammetta is really not so different from the virtuous married woman of her time and (often) of ours --- neither is free to be herself.

And that is what draws her to Bucino and sustains their partnership, as she explains to Aretino. The writer is speculating (rudely) about why the dwarf is so attractive to women, and Fiammetta replies that she feels more comfortable with him than any other man: "Bucino has a way with women…because he enjoys their company.… He is not frightened of us, and he does not need to impress or possess us --- and you would be amazed, Pietro, how few men that is true of."

With its lively sexual politics, its dark ironies, and its exuberance, color and charm, IN THE COMPANY OF THE COURTESAN is one of the best historical novels I've read in years. This is a writer in command of her craft, start to finish. And, true to Dunant's background in suspense fiction, the book ends with a lovely, surprising twist that makes Fiammetta and Bucino's "company" look suspiciously like a real family. Brava.