James Gray's The Yards (2000) opened in the U.S. to fairly mixed reviews, many politely recommending it and many politely panning it. Nobody got too excited about it either way, and neither did audiences. According to boxofficemojo.com, it grossed less than $1 million on a $24 million budget. But Europe was a different story. European film critics generally are geared more toward artistry and personal expression than they are stories and subject matter, and I often agree with their assessments, but for some reason they really latched onto The Yards. I caught up with the film later, when Miramax released a special edition DVD in 2006, and I found myself agreeing with my American colleagues. It has a kind of nostalgia for the 1970s, with James Caan, Ellen Burstyn and Faye Dunaway in rich supporting roles, and so perhaps it gives the illusion of grit and risk. But the leads Joaquin Phoenix, Mark Wahlberg and Charlize Theron placed it squarely in the present when risk is better in theory than in practice.

Seven years later, Gray has returned with his third film (his first was 1994's Little Odessa), and I've slowly begun to understand Gray's brand of low-key skill. Certainly the premise, about two opposing brothers, one in law enforcement and the other hovering near the underworld, has been around for some time, and could have been told in any early D.W. Griffith or Raoul Walsh silent picture. John Woo made a masterpiece from the idea with his A Better Tomorrow (1986). And Clark Gable and William Powell played out the idea -- as best friends instead of brothers -- in Manhattan Melodrama (1934). But Gray takes the tale, shakes it out and makes it compelling once more.

In Gray's latest, We Own the Night, the two leads, who both return from The Yards, assume their same good-bad relationship, with Mark Wahlberg as the responsible cop Joseph Grusinsky, working under his father, the chief of police (Robert Duvall). Brother Bobby (Joaquin Phoenix) wants to avoid association with the cops and is using his mother's maiden name, Green. Complete with his hot girlfriend Amanda (Eva Mendes), things are looking up for Bobby. It's 1988 in Brooklyn and business is booming. It even looks like his Russian boss Marat Bujayev (Moni Moshonov) will open a club in Manhattan and put Bobby in charge. Unfortunately Joseph raids Bobby's place, which results in a retaliation, an attack on Bobby. At the same time, Bujayev's evil nephew Vadim (Alex Veadov) approaches Bobby with an offer to help traffic drugs through the club. Bobby chooses loyalty for his family and agrees to go undercover and help blow open the drug traffickers.

Yes, it's all fairly predictable, and like The Yards, it wants to evoke a 1970s feel and fails -- mainly because it's no longer the 1970s. But Gray still directs with intelligence and patience, winding his way around the conventions with rich, believable characters. The movie's design is also top-notch. It opens on Bobby's cavernous club with its pumping music, sexy patrons and all-around pleasure. From there, Bobby attends a celebration/ceremony for his brother, held at a local church and catered with paper cups and homemade potato salad. Even the sound system -- used for droning cop speeches -- is hollow and full of echoes, in comparison to the clear, loud pop music in the club. Each room feels like a real place, such as the police station conference room, surrounded with papers, gray metal drawers and various coffee cups.

Best of all, Gray includes three truly breathtaking action sequences, the equal of any action blockbuster made this year. When Bobby infiltrates the drug dealer's headquarters, Gray builds the suspense beautifully and over a long period of time, using only a single piano note for his score. Later, a car chase is filmed almost entirely through the windshield of one car, in the pouring, pounding rain, using only the windshield wipers for accompaniment. Finally, we get our final shootout, filmed in a field of tall reeds, also with an innovative under-use of music.

Additionally, Phoenix and Wahlberg were both rather chilly, overly serious actors back in 2000, and they have each grown more mature, more nuanced and more interesting in the years since. It helps that the two leads are in tune with Gray, and obviously trust him, but Gray also plays into their old habits; once again they're a bit too serious and clammed up. The picture certainly could have been improved if only Gray could have understood what made Wahlberg so compelling in films like I Heart Huckabeesand The Departed. In those films, he appeared to be cutting loose and having fun. If Gray could let go of the 1970s and find some organic, energetic way to tell his stories -- and thereby challenge his actors -- he could be one exciting filmmaker.