In September 2001, Clare Dunkle, an American living in Germany, had just finished writing her first novel. She thought she'd need an agent to get it published, but she did a little sleuthing on the Internet first. The first site she checked was Henry Holt's, because back in the 1960s the house had published Dunkle's favorite books ever, Lloyd Alexander's Prydain series. Sure enough, Holt accepted unsolicited manuscripts, and although Dunkle—a former librarian—had low expectations, she sent off her manuscript. Six weeks later, editor Reka Simonsen e-mailed her to say she'd like to publish the book.The book is the Hollow Kingdom, with a glowing blurb by none other than Alexander on its jacket.

Dunkle has always had an intense relationship with books. As a child she twice wrote to Lloyd Alexander, to tell him "all the things he should have done in his [Prydain] books and hadn't," she remembers, wryly. "When I would love a story," she says, "I would move in there with my own characters, and live there for a while."

Shortly after Dunkle's family moved to Germany in 2001 (her husband, a civil engineer, accepted a job with the Department of Defense at an Air Force base there), her two teenaged daughters, whom she had home-schooled for two years, entered boarding school. "Almost as soon as they were out the door," she says, "my brain took a holiday and plunged into daydream. I was thinking about monsters, and why we don't ever let them win.

"That evening I complained to my husband that I had been daydreaming, instead of doing whatever project or task I'd had in mind. He said, 'Write it down for me. I want to see it.' It was the accident of the moment—if he had asked me two weeks later, the story would have been something else entirely.

"But I was thinking then about monsters and what it says about ourselves if we only create worlds where we are supreme. In the old myths, like Persephone or the Black Bull of Norroway, the alien race very often won. I wanted to create a situation where it is morally acceptable for the monster to win, and to deal with the culture shock that ensues."

While The Hollow Kingdom stands alone, two other novels, inspired by her daughters' questions about the characters' fates, will continue the story; the second, Close Kin, is slated for October 2004. Another novel in the pipeline, By These Ten Bones, enters new territory: the medieval highlands of Scotland.

The Hollow Kingdom features more than "monsters." Opening in 19th-century England, it introduces two strong but orphaned sisters, the elder of whom, Kate, is pursued by a goblin who wants to abduct her as his bride. PW's starred review praised the storytelling for its romantic tension and suspenseful twists and turns. But the substance of the story reflects many of Dunkle's interests. "I read all the folklore I can get my hands on, and all the anthropological studies," she says. "An author can't figure out just the pretty elements of an imaginary world. You have to figure out where the food supply comes from, too."

Fantasy, she adds, is not escapism. "It is like a laboratory, a way for a writer to pinpoint what he wants to explore. In The Hollow Kingdom, for example, I can focus on what happens when an ugly old man has a relationship with a beautiful young woman. Is there a way for that to work? We find it unacceptable, because we think love depends on chemistry. But it's worth telling our teens that love depends on respect, generosity, self-sacrifice and allowing the other person room for growth.

"I don't think it's worth writing just for entertainment," Dunkle says. "If it challenges the author, it should challenge the reader, too."