A friend of mine says your work is all about who your mother is," says Anne Schwartz, editor of the eponymous imprint at Atheneum Books for Young Readers. She's dressed in New York working-woman black, funky rather than corporate, a working mother who lives in a house in Brooklyn rather than a Park Avenue pad. "I think what my friend says is true for me," Schwartz continues. "I was pretty insecure. Although I started in adult trade I felt children's books were less intimidating. I guess I felt I might succeed."

For more than two decades at three different houses, the 46-year-old Schwartz has succeeded in publishing well-reviewed children's books that have sold in solid, respectable, predictable numbers. "On some unconscious level, in many of them I was looking for something Anne Schwartz at the age of four would have liked or should have had, a strong female protagonist among other things," she muses. Then along came Olivia. Talk about strong.

With over 500,000 copies in print in the U.S. less than a year after publication (including book club editions), Ian Falconer's Olivia has achieved the kind of sales—and brought Schwartz the kind of success—every editor dreams about. It was a Caldecott Honor Book and a Book Sense Book of the Year. Another 100,000 copies are in print in foreign editions. The picture book is about a plucky young pig who could never be mistaken for a pushover, an original in her own right, but also a younger, more laconic, 21st-century homage to Kay Thompson and Hilary Knight's Eloise. Olivia has been sold into 21 countries and 17 languages, and appears to be settling in for the long shelf life enjoyed by a children's classic. In October Schwartz will publish a sequel, Olivia Saves the Circus (Forecasts, Aug. 27). Inevitably a great deal is riding on this second book's success, with its first printing of 250,000 copies.

Falconer's two picture books have brought some similar and some very different challenges to his editor's desk, leaving a lasting imprint on her career. "When I first saw what would become Olivia, I really felt"— Schwartz pauses— "at last! I love many, many of the books I've worked on, but Olivia had that phenomenal combination of an innate understanding of what a picture book should be and something with instant appeal."

Falconer entered Schwartz's life in autumn 1998 when she was working on a manuscript in need of an artist. "I went to the New Yorker, which is where I like to go when looking for an illustrator. Ian had done work for them, and had also just designed a jacket and a stage set. I wanted something moody, sophisticated, playful. I got his number from the magazine.

"Ian's very shy. In fact I remember when he came in his hands were shaking. We went through his portfolio, but then he admitted he wasn't really interested in illustrating somebody else's text, that he had a picture book he had done for his niece he wanted to show me. It was the best work I've ever seen come from a portfolio. It was contemporary but timeless. The combination of black, white and red was fresh and different, while at the same time it reminded me of Eloise."

Schwartz signed Falconer to a two-book contract. "One of the things I love about picture books is that the editor really can be part of the creative process," she says. "Often the author and illustrator are different people, in which case the editor has to make sure the words and pictures work together. Although Ian combined both roles and the book was 90 percent there when I first saw it, he didn't have the technical know-how or exact language that a picture book needed. We tinkered, restructured, and called in Ann Bobco, our art director. Ian had a wonderful instinctive sense, but Ann and I had experience."

During the editorial process, Schwartz asked Falconer to add a lot of images, including new scenes, because she felt the pages would otherwise be too stark for young children. Occasionally Falconer's originality brought unexpected consequences. In one scene Olivia goes to a museum and stares up at a painting by Jackson Pollock. "Ian was using just a portion of the real image," Schwartz recalls, "but to get copyright permission we were told to show the full painting, which wouldn't have worked on the page. It was very late, the book was already in proofs, and we found ourselves consulting with the legal department.

"In the end, though, the whole thing turned out to be a plus. We put the complete Pollock, greatly reduced, on the copyright page, and did the same thing with the Degas painting we used on another page, even though that was in the public domain. We learned that that's the kind of information librarians really like to have to help teachers and kids.

"There was also a big debate about the page where Olivia pretends to be Maria Callas. I felt no kid would ever know who she was, and I wanted him off the whole opera thing. But Ian works a lot on stage sets and he wanted it, just as he wanted a scene about the ballet. In the end I caved, which is what I usually wind up doing. It's his name on the book.

"Although come to think of it, that's another special thing about Olivia—Ian's name isn't on the front of the book. The jacket felt much stronger without it, as he suggested it would. It's something I'd never have done, but he knew to do it, he's really an artist. And I'm pleased to say he's rather a rich artist now, and that's very satisfying for me."

The experience of doing the first book, Schwartz says, was "very pure. It was just the three of us—Ian, Ann and me—and that was part of what was so wonderful and fun about it. There was a lot of in-house excitement, but no one else was involved until much later."

She admits with a certain ruefulness that the second book was a rather different experience. "Ian was so nervous, and we were, too. He had been working on the first book for five years. This one he had to deliver in a year, and he didn't have any idea of what it would be, didn't know if he could create a plot line.

"Normally I'd say to the author, do whatever you want. But when Ian said he wanted to do something about Olivia and the circus, my response was, 'Oh God!' A lot of people have done circus books but they don't generally sell well. Everybody in-house was now paying attention to this author, who seemed to have come up with a not particularly commercial idea. I was in a very complicated position.

"I felt it was my job to give him the information that circus books don't sell and to try to dissuade him. He decided he really wanted to do it and that he was going to do what he wanted to do. Well, the fact of the matter is, who's the genius here? Not me or my boss or my boss's boss. We helped him along, but it was Ian who created Olivia and who would create the new book. It turned out that the book isn't so much about the circus as about a child's imagination. I think we can get beyond that perception of the circus because it's about Olivia."

Schwartz's dark eyes look away for a moment. "A huge success is double-edged. Everybody wanted to be part of the process second time around. A long time ago Walter Lorraine, an editor I much admire, gave a talk about an editor's wearing two hats, editorial and marketing. He said to keep the editorial hat on until the book is at the printer's. That becomes much harder to do with something like Olivia.

"This is a great place to work, and I have a lot of respect for the people I work with, but everybody comes at it differently. The marketer's job is to market; the publisher's is to make as big a splash as possible. The editor has to edit, and I've learned now that it's so important during the creation of the book that nobody else be involved. It's so easy to start paying attention to all the wrong things, like how to make a book sell before you've even figured out what the book is. That can wreck what is such a delicate thing.

"Ian was behind schedule. We didn't have much to show and the less we had, the more anxious everybody got. And there were other countries involved, Bologna...."

When Falconer sent in the jacket, he had designed it in peach and black, which set off further alarm bells. Schwartz recalls, "People wondered if it would sell as well as black and white and red, and wondered if the image of Olivia was as appealing as on the first book. Ian did two or three drawings for the cover but then he dug in his heels. This was the image he wanted, and he was right to do that. Not to trust him would have been stupid."

There are subtle differences between Olivia I and II. Schwartz says with a smile, "My daughter pointed out that no kid's room is as neat as Olivia's was in the first book, so in the new one it's less ordered. Ian had learned a lot, and his draft text was much closer to the final version this time. Our art director suggested a gatefold, Ian loved the idea, and on the new book we knew we could afford it."

After Olivia has spun her elaborate fantasy about being a circus star to her class, her teacher asks whether she is telling the truth. Falconer was worrried about his initial impulse to use the Clinton-inspired "To the best of my recollection," but Schwartz assured him parents reading the book to their children would enjoy it and it should be kept in the text. Another in-joke comes when the piglet is asked what happened during her day in school, Schwartz provides Falconer with the answer every parent has heard. "Nothing," says Olivia. But an editor doesn't always get what she wants. Schwartz says with a laugh, "We couldn't find space in the book for my favorite drawing. In the end, we had to put it as a tiny image on the jacket flap."

From all her years publishing books, Schwartz says she has learned that "the best children's authors and illustrators come in two kinds. There are those who are so in touch with the child in themselves that they're almost children. They're the most brilliant, and Ian is one of them. The other kind observe children very, very carefully."

When Schwartz landed her first job in publishing working in promotion for Jane Friedman at Knopf, she tried to observe very carefully, too. "I feel really lucky to have started there, in the Bob Gottlieb days, when Old Man Knopf, as Alfred was referred to, still used to come in once a week. But at the end of the day, there was nothing tangible to show doing promotion, and that kind of accomplishment is important to me."

The young publicist went to Janet Schulman, then head of library marketing for children's at Knopf, and said she wanted to be an editor. Schulman gave her suggestions of people to call. "I remember meetings with two of them. Alice Bregman said, 'Don't go into kids' books, there's no money, no respect." Susan Hirschman of Greenwillow told me, 'There's no nobler profession.' I chose to listen to Susan."

She was an editor at Dial for six years, then a job opened at Knopf and she returned to work under Schulman, whom she credits as having taught her "how to be a publisher, how to look at a book, sell it to others in-house and market it to the outside. None of us really knows what we're doing. We do it and hope it will come out right. Janet supported me and gave me confidence and that's a real gift. "

Schwartz says she's only ever wanted to have the autonomy to work on her own books. Many of her authors originally came from the slush pile, and she has never bought in a book originated abroad. She started her first imprint, Apple Soup Books (named by her son) at Knopf in 1994, and left for S&S a year later. Her list of authors and illustrators includes names like Patricia C. McKissack, James Ransome, Petra Mathers, Giselle Potter, Jerry Pinkney, Barbara Park, Nancy Van Laan and Deborah Hopkinson.

Editorial models, in addition to Schulman, were Regina Hayes and Amy Ehrlich. "Amy had a great eye for original talent. And Regina knew how to identify what might be successful and how to put it out to live up to its potential."

The editor's role hasn't changed much over the years, Schwartz says, "but children's publishing has. People see now that real money can be made, so publishers are paying a lot more attention to the children's departments. That can be limiting, but I try not to let it get to me. I love working on these books and that's the part of me you can find in any of them. Sometimes I fall short, but supporting the vision of the author and illustrator is the essence of my job."