It's two weeks before the release of Titanic, and an enormous sense of relief is apparent on James Cameron's tightly drawn face. And why not? After three years of relentless toil, his $200 million gamble is no longer just the most expensive movie ever made--it's his favorite, and the critics seem to like it as much as he does.

Suddenly, nobody seems to care whether Titanic will earn its money back. Cameron, the acclaimed action auteur of Aliens, True Lies, and the Terminator movies, has used modern special effects technology in the service of good old-fashioned storytelling to make something new out of the best-known disaster tale of the century. Leonardo DiCaprio and Kate Winslet star as lovers aboard the "unsinkable" British luxury liner that collided with an iceberg in the North Atlantic early on the morning of April 15, 1912. The Titanic--lovingly and painstakingly recreated in the film--sank two hours later, and more than 1,500 of its 2,200 passengers died.

Cameron, forty-three, actually backed into the Titanic story a decade ago. While researching deep-sea submersible systems for his film The Abyss, he met explorer Robert Ballard, leader of the crew that had recently located the Titanic wreckage off the coast of Newfoundland. Sufficiently inspired, Cameron took two deep-sea submersibles to the Atlantic floor in 1995, and brought back wrenching footage of the real Titanic wreckage that appears on-screen in the movie's present-day framing device. All told, he made twelve grueling dives--many of them lasting fifteen to seventeen hours--and logged more hours on the Titanic than the passengers did back in 1912.

Upon returning to the surface, the notorious perfectionist performed every major function on the film, earning screenwriting, producing, directing, and editing credits, and even drawing a portrait of Winslet that plays a crucial role in the story. Over the past year, he had only two days off: New Year's Day, and the day last September when he married actress Linda Hamilton, his fourth wife. As payment, he received only his six-figure writing fee, having forfeited directing and producing checks in an effort to keep studio funding flowing.

Relaxing in a suite at a posh Beverly Hills hotel, Cameron tells Mr. Showbiz that all the toil paid off--Titanic, he feels, represents the high-water mark of his career. "All my films are love stories," says the filmmaker, "but in Titanic I finally got the balance right. It's not a disaster film. It's a love story with a fastidious overlay of real history."

How did your journey to the bottom of the Atlantic to film the Titanic's wreckage change your conception of the story you were making?

It was sort of like going to Mecca first, and getting religion. We went there with very specific objectives, and I took two things away from the experience. One, get it right. Do it exactly right. We've got the real ship on film--everything else has to live up to that level of reality from this point on. That imbued everybody in the art department with the same kind of crusade of correctness. And that applied also to what boats were launched at what time, what officer was where. The whole physical staging of it was also influenced. But there was another level of reaction coming away from the real wreck, which was that it wasn't just a story, it wasn't just a drama. It was an event that happened to real people who really died. Working around the wreck for so much time, you get such a strong sense of the profound sadness and injustice of it, and the message of it. You think, "There probably aren't going to be many filmmakers who go to Titanic. There may never be another one--maybe a documentarian." So it sort of becomes a great mantle of responsibility to convey the emotional message of it--to do that part of it right, too.

What did you think of the 1958 Titanic film, A Night to Remember? Did that show you how not to do your story?

Yeah. But I liked Night to Remember. I admire the film, but it is an earnest retelling of the historical event. It would not have been satisfying for me to do Night to Remember, or to just change the emphasis and do more on certain historical figures on the ship. I wanted to do something very different. I mean, Gone With the Wind is not about the burning of Atlanta. The Civil War is the backdrop for that, and the sinking of the Titanic is the backdrop for this story. You can learn a lot of Titanic history from [my] film. All of the historical stuff is done absolutely rigorously and correctly. We didn't take any liberties just because it's a fictional story at its core. Even the story of Jack and Rose is entirely permissible on the ship. The car they go into in the hold to make love? That car was there. It was a red 35-horsepower Renault car owned by William E. Carter and insured for $2,500, which he did collect. As far as we know, it's still down there. Maybe I'm just amusing myself, maybe it's entirely masturbatory, but I was trying to find a way to tell a fictional story within very rigid confines of known history.

You earned a six-figure fee for the Titanic screenplay you did three years ago, but gave up your salary and potential profit points. Why?

The answer to that is very complex, but the short version is that the film cost proportionally much more than T2 and True Lies. Those films went up seven or eight percent from the initial budget. Titanic also had a large budget to begin with, but it went up a lot more. As the producer and director, I take responsibility for the studio that's writing the checks, so I made it less painful for them. I did that on two different occasions. They didn't force me to do it; they were glad that I did.

One of many emotionally moving moments in Titanic occurs when Ruth [Frances Fisher] is tying on her daughter Rose's [Kate Winslet's] corset, and gives it a final pull. It's a powerful visual metaphor for the suffocating world Kate feels trapped in. Was that idea on the page, or did it come out of the direction?

It's interesting, because on the page Rose was helping her mother dress, and the mother had her back to her and was talking to her. I'd written it that way, but the night or morning before shooting the scene, I thought, "I should switch this." I got everybody all freaked out, because I said, "I want Kate in the corset." The wardrobe people all flipped out, because she was never supposed to be seen in her corset. I said, "This is really important; we have to do it this way." The lines stayed exactly the same, but the emphasis changed so much. Those are the great discoveries that you make when you're actually taking theory and turning it into practice.

It helps that you're not only the writer, but also the director.

Yes, but the way the Hollywood system works, a lot of directors probably wouldn't have done that, because the studio had approved the script. But, for me, writing is just part of the directing process. The writing is one draft, the shooting is the next draft, and the editing is the last draft.

The costumes play a big role in Titanic from the audience's perspective. Did they also impact the performances you got from your actors?

A lot of the women's performances on this film were informed by the fact that they were wearing corsets. When Frances [Fisher] was looping [re-recording] the picture, she had a hard time recreating her level of performance--Ruth wasn't coming back to her. So we redid part of the looping, and I told her to bring her corset with her. They hadn't let her wear it before, because the bones in the corset were making noise. I said, "Screw the noise. Put the corset on." The second she did, she went back into character. Part of the bearing, the propriety, of her character came from that.

Given the repression of this corseted world, the scene in which Jack [Leonardo DiCaprio] draws Rose naked carries a powerful erotic charge.

The scene's very innocent, very tame.

But it still carries quite a charge in comparison with what came before.

Exactly, because you understand the repression that's the backdrop. Because it's behind closed doors, and it's their secret place, and they're surrounded by all this elegance--this sort of baroque elegance of that period. But it's the repression. You know what it means for her, the freedom she must be feeling. It's kind of exhilarating for that reason.

At what stage of the filming did you do those intimate scenes between Kate and Leo? Did the actors have time to get to know each other?

This was the beauty of it: The nude scene where he draws her, that was the first scene they did together. It wasn't by any kind of design, although I couldn't have designed it better. There's a nervousness and an energy and a hesitance in them. They had rehearsed together, but they hadn't shot anything together. If I'd had a choice, I probably would have preferred to put it deeper into the body of the shoot. We were just trying to find things to shoot because our big set wasn't ready. We were supposed to start with our day exteriors up on the big Titanic set. It wasn't ready for months, so we were scrambling around trying to fill in anything we could get to shoot. It was horrible. But having seen how it worked, I think it worked out very well for the scene.

How did Leo and Kate get along on the set, and how was it to work with them?

Leo's a real cut-up on the set. He blows off a lot of steam. In between takes, he's always goofing around. Kate tends to be very serious and very focused: "We're here to do a job, and we're very disciplined, and I'm thinking about my character." Leo would just come over and do something so outrageous, something so gross it would crack her up. Then she'd get angry and punch him. But he would keep going, to the point where she was in tears laughing. It was so necessary that he would do that for her, because it was such a microcosm of what their characters were like. His character is constantly functioning as a kind of catharsis for her, releasing her from herself--from the cage that she's been put in by social influences. So then they'd come into the scene, and they'd have that energy.

How much of Leo is in Jack?

I'm sorry that Leo doesn't do more interviews, because I'd like people to see who he is, to see that Jack was a creation, and not just . . . Leo. He's done these kind of off-beat characters in the past, and people might make the assumption that we're just seeing the raw guy. But it's not. He's as much of a creation as any of his other characters. Once Leo's on, he's very serious. He's absolutely disciplined, and so is Kate. We got along great, because we're all perfectionists, all in different ways.

Working with actors who are that good is what I love most about filmmaking. A lot of [filmmaking] is a big headache. Most of making a big film like this is just a giant pain in the butt. But working with people that good is where your heart really soars. You're part of a real-time act of creation. You never could have predicted exactly what it would be, and here it is happening right in front of you. Yet you're a participant in it.

Your actors have said that you knew exactly what you wanted on the set. That obviously has its advantages, but as a director, don't you have to stay a little bit flexible too?

That's the hardest thing to do on a big technical film, because the more you can plan in advance, the better. And the more decisions you've made before you ever get to the set, the better. But you have to stay open to the moments of discovery. You have to keep your heart open to the magic. The first thing I'll do when I come onto the set is I'll say, "Okay, guys, I want to own the set with my cast." I shoo off the whole crew, even though they're on the clock. It's getting into the set, and seeing, what's the difference if she comes through the door before he does? Where is she going to walk in the room, and how is that going to affect the staging and blocking? Does the scene play like that? Or does it play better with the same dialogue where they're across the room from each other? Some of those things you know from rehearsal. But you can't really get it until you're there--in the set, in the moment, in costume.

You built the Titanic almost to scale: 775 feet long. Why "almost"?

Ah, what's another couple of million dollars, right? The point is that it's a couple of million dollars that could go into other places. I knew it wouldn't serve the film to do it. First of all, our lot wasn't big enough. We didn't have infinite space. Everything would grow incrementally. The track for the crane would have to be longer, the tank would have to be bigger, more gallons of water would have to be heated. Plus, you can't tell, because we didn't scale the whole ship down ten percent. What we did, if you imagine that the Titanic was a loaf of Wonder Bread, we took out that slice and that slice and that slice, and pushed it together. So it's still as tall and as wide as the real Titanic.

From whom did you inherit your legendary work ethic? Was your dad a tough taskmaster?

My dad's a workaholic. [Laughs.] My mother raised five kids, so she was busy. I don't know. I was just always industrious. It must be genetic, because when I was a kid, I'd round up all the neighborhood kids and we'd build something--a tree house or an underground fort or a go-cart. I could always get people to enlist in the service of an idea. I was always very industrious.

On Titanic, news reports had you sleeping one or two hours on some nights. Is that true? And how many hours do you sleep when you're in a normal mode?

In normal mode, I sleep eight hours a night. When I'm shooting, if I get less than 6 and a half, I'm screwed. So I usually try to go for seven. I'm kind of a sleep sissy that way. I gotta have my down time. Most people think I probably get two hours sleep a night, and I'm constantly on.

The press also reported that you were taking vitamin B shots during the filming.

I did. Once a week I got shot in the butt, and I made my first assistant director do it as well. It's a stamina game. If you get sick, you're doomed. Anybody else on the whole production can get sick--we can even fill in for the actors, and shoot other scenes. But if I get sick, the train stops. We also drank this green stuff. I called it pond scum, but it was wheat grass extract.

And it worked?

I didn't get sick. The Mexican B-12 shots hurt. Your butt ached for six hours afterwards. It was a little turbo for your immune system. Some people debate the effectiveness, and maybe it's more a placebo effect than anything.

So those reports of long, brutal hours of shooting were false?

This whole myth about how we worked eighteen-hour days is impossible. We'd shoot between twelve and fourteen hours, with fourteen the absolute maximum. I'd have an hour of production meetings and walking the set to figure out what we were going to do the next day. Then, I'd have at least an hour of dailies. And then there's transit to and from the set. Then I'd usually have an hour of decompression: non-Titanic time for myself.

There are several breathtaking transitions in Titanic. For instance, going back to 1912, from Old Rose's [Gloria Stuart's] face to Rose's [Winslet's]--

Transitions are everything. They're especially important in a film like this, where you are going back and forth in time, through memory, or through a character. She's your doorway into the past. You have more time to be creative when you're writing. You have months to sit and think of these images. On the set, you've got to go in knowing what you're going for.

Did the fact that Titanic must reach a tremendous mass audience make you compromise your vision at any time?

The biggest act of compromise when you're making a piece of populist filmmaking is that there's a certain intellectual depth of idea that you cannot explore freely in the way that you could in a novel. Or if you want to take ten pages, or twenty or a hundred, and make an excursion deep into a person's past or psyche, you can't do that. We pretty much pushed the limit on this film of how much time you can spend on character in mainstream filmmaking.

Your attention to historical detail is impeccable, but you did choose to omit what some might call a crucial historical fact--the ship that was close to the Titanic, but had turned off its radio for the night and didn't hear their SOS calls. Why?

Yes, the Californian. That wasn't a compromise to mainstream filmmaking. That was really more about emphasis, creating an emotional truth to the film. There are a lot of aspects of the classical telling of Titanic that I thought were important in pre- and post-production, but turned out, as the film evolved, to be less important. The story of the Californian was in there; we even shot a scene of them switching off their Marconi radio set. But I took it out. It was a clean cut, because it focuses you back onto that world. If Titanic is powerful as a metaphor, as a microcosm, for the end of the world in a sense, then that world must be self-contained. The Californian was a dead end; it could have been a player, but it wasn't, you know what I mean? Ultimately, it wasn't important.

In a way, Titanic is a parable about the dangers of trusting blindly in technology. What's the next Titanic disaster awaiting us?

We're due for a big shock soon. There are areas that we know are dangerous, with respect to nuclear power, biological weapons, and maybe, to a certain extent, genetic research. But we utterly and completely embrace the silicon chip. We've let computers become a fabric of our life. We don't yet know the long-term impact of that. History has shown that every technology brings a curse with it. The lesson of Titanic is, just don't go so fast when you're dealing with that much power and energy, the kinetic energy of a ship that weighs 48,000 tons. Give yourself time to turn, because that's all they did wrong.

Tell me about casting the long-retired thirties film star Gloria Stuart as Old Rose, the one living survivor of the Titanic.

My casting director found her. She was sent out on a mission to find retired actresses from the Golden Age of the thirties and forties. Gloria was a leading lady for a couple of years, but she hasn't emerged as one of our really big, memorable stars. I honestly didn't really know who she was. There were a lot of names on the list that were recognizable. At that point, we were going, "Oh, my God, is she still alive? Is she still working?" It was exciting to meet Fay Wray, who was one of the contenders. But Gloria was just so into it, and so lucid, and had such a great spirit. And I saw the connection between her spirit and Kate's spirit. I saw this joie de vivre in both of them, that I thought the audience would be able to make that cognitive leap that it's the same person. Gloria's a pistol. She can play the grande dame, but every once in a while she'll lapse. Her husband wrote for Groucho Marx for many years. She's kind of a gutter-mouth, so we got along fine.

Where did your love of filmmaking come from?

My formative years as a film fan, the most vivid times, were in the sixties, when I was a teenager. It was really whatever was playing that week, everything from Woodstock to Easy Rider to Catch-22 to 2001. It was a real mélange of the start of independent filmmaking and the tail end of epic filmmaking. It was whatever worked for me. It's only later that I'm able to classify these films and put them into their proper "family tree" of film aesthetics and influences.

A film that affected me a lot when I was eighteen or nineteen was Dr. Zhivago. A lot of people don't consider that Lean's best film, but it was my first David Lean film on the big screen. It's still a stunning movie. So if there's any sense of conscious emulation, or setting the bar high, it would be Lean. But I didn't get there with this film [Titanic]. I might never get there, but you gotta set the goal high, so that when you fail, you're failing at a higher level.

Do you believe in film schools as a training ground for young filmmakers?

One of the best things that happened to me was that I didn't go to film school. I used to go down to the USC library and read everything. I'd Xerox stuff. I made my own reference library of doctoral dissertations on optical printing and all that. I really studied technical stuff formally. But I didn't study film aesthetics because I figured it becomes too solipsistic. It's just about other movies. You need training; you need mentoring. And you need life experience. I was living life for a few years, hanging out with my druggie buddies down in Orange County, and studying physics and doing a lot of reading and traveling. So you have something to say, and some real-world experience that's not just based on other movies.

The main thing is just picking up a camera and making a film. That's the most important thing. People say, "How do you get to be a filmmaker?" I say, "Go home, pick up your video camera, and make a film." Well, it's on video, it doesn't matter. But it's an image; you're deciding what goes into that image. People say, "Well, where am I gonna get the money?" Fuck the money. Get some people and just make a film. Because if you make a film and you put your name on it that says "Directed by," even if it's the worst piece of crap in the world and cost no money, everything after that, you're a director. You're just haggling over your price, you know what I mean? [Laughs.] And the budget. It scales up from there, but you've defined yourself in that role. If you can't define yourself in that role to yourself, then you're just chippin' away at it, not really doing it.

Earlier in your career, you worked with Roger Corman, who once remarked that if someone worked for him on three pictures, they were probably no good.

Exactly, right. Well, I only did two. [Laughs.] I got out of there in time.