On that balmy spring evening, in his grand mansion with its vast lawn stretching down to the sunset over the Ohio river, I was converted to Woodford Reserve, the official--and delicious--drink of the Kentucky Derby. It is what the cognoscenti call a "boutique bourbon."

That was seven years ago when I first went to Louisville, Kentucky, with a motley group of foreign correspondents at the invitation of the Tony-award-winning Actors Theatre for its annual Humana Festival of New American Plays. Fortunately for us, that was the year they staged Tony Kushner's play "Slavs," well before it opened in New York. In the wake of the enromous international success of "Angels in America," there was much curiosity about Kushner. Actors Theatre organized a press conference at which the playwright talked informally with journalists--a veritable treat for any theater lover.

Since then, Louisville has become one of my favorite American cities--with its intimate scale it's more manageable than a big metropolis and yet it's replete with cultural riches. Apart from the Actors Theatre, which by itself is enough to draw one to the city, Louisville boasts the fine Speed Art Museum, its own ballet, the Derby and the Slugger [Baseball] Museums, the renowned Churchill Downs race track, first-class restaurants and, in idyllic settings just outside the city, horse farms and bourbon distilleries.

The greatest surprise of all is that Louisville's culture is almost entirely subsidized by its rich business community. Thus the Actors Theatre is privately funded by well heeled patrons and by Humana Inc., Louisville's leading managed health care company. The Humana's architecturally impressive downtown building was hailed by Time magazine as the "Building of the Decade" (the Eighties) and in this city of interesting architecture, the Actors Theatre is a landmark, too. It boasts several state of-the-art stages, each a different size, all equally versatile with their highly sophisticated stage machinery. Over the course of the year, Marc Masterson, the Artistic Director of AT, and his literary staff read 800 full-length plays to pick a representative eight to showcase at the Humana Festival, which runs for a month in the spring. Thanks to smart scheduling, all the plays can be seen in one weekend by out-of-towners. The festival is thoughtfully planned and efficiently run. AT runs a regular shuttle van to and from nearby hotels. And the theater's basement houses a funky bar that serves excellent fare from morning till late at night.

The Humana program includes AT's trademark "10-minute plays" and, in the lobbies, innovative hi-tech plays are presented round the clock: Last year it was "telephone plays," this year "technology plays." As in any festival, the quality of the offerings is mixed, but the staging is exceptional. This year's big-name offerings were Chuck Mee's romantic and delightful "Limonade Tous Les Jours" and Tina Howe's magical "Rembrandt's Gift." As usual, several unknowns showed exciting and innovative works. The Humana Festival offers new playwrights (and new plays of established playwrights like Kushner, Mee and Howe) an opportunity to be staged under the best theatrical conditions. The works are seen by reputable critics, national producers, directors, marketers; theater people buy, sell, promote and network at the festival. Playwrights cherish the rare luxury of seeing their works onstage so they can be refined or rewritten before they go on to repertory companies all over America; the best make it to Broadway. But unlike Broadway, AT's ticket prices are affordable and the atmosphere is informal, friendly rather than commercial.

Many events center around AT's Visitors Weekend, when Louisville's wealthy graciously open their stately mansions to out-of-towners and flaunt genuine Southern hospitality. Yet, Louisville is not quite Southern. It sits smack on the North-South divide and is more Midwestern than Southern. What is distinctly and charmingly "Southern" is the local accent. Long before I ever got to Louisville, it took me months of listening to a Kentuckian colleague to figure out that accent. Even so I have yet to master saying "Louisville" the way the locals do: not a la Française but "Looavul" or "Luhvul."

There is no dearth of wealth in this Bible-belt region though, surprisingly, much of it is sin-generated: butts, booze and gambling at the Derby account for the city's largess. Tobacco is the cash crop, liquor is the big industry. The Brown family are old-timers in the bourbon business. Long before Prohibition, the Brown-Forman Corporation was manufacturing whisky. Now it has branched out into the sale of Sonoma wines, single-malt scotches, Finlandia vodkas, Lenox china and crystal, Gorham silver and Hartmann luggage. But their flagship Woodford Reserve continues to be triple-distilled the old-fashioned way in copper stills and aged in charred oak barrels at the prestigious Labrot & Graham, a tiny 1812 vintage distillery in beautiful Versailles (pronounced Vur-sails). On a visit there I learned to appreciate the color, bouquet, flavor and finish of classic bourbon the way one does a fine wine's. My guide was L&G's master bourbon taster, Peggy Noe Stevens, who, at age 36, is the only woman in the profession.

Then there is Louisville's beloved grand dame, the remarkable Mrs. Owsley Brown II, who runs Louisville Stoneware, a sick company that she rescued because it traces its roots and process back to 1821. Using local clay, it creates unique, handcrafted, handpainted pieces. Last spring Christy Brown threw a mint julep party in the warehouse of Louisville Stoneware for AT visitors. It's the cocktail of the Kentucky Derby, and the Browns are big supporters of both the AT and the Derby. Made from the family's bourbon (Jack Daniels, Old Forester and Southern Comfort among them), the drinks were served in Louisville Stoneware julep cups painted with Kentucky horses.

This year, Mrs. Brown was moved to respond to Sept. 11. Active in Louisville's Inter-Faith Cathedral Heritage Foundation, she organized a "Jihad for Knowledge" conference at which international Muslim scholars and leaders dialogued with locals and nibbled on boxed Indian lunches. There I met Gray Henry, whose ancestors had donated the land that makes up downtown Louisville. She admired my Indian outfit, then talked about the work of the late Ananda Coomaraswamy, an esoteric Indian art scholar. Later she drove me to her gorgeous little home, in an exclusive suburb, filled with tasteful objets from all over the world. She had traveled overland through all of Arab North Africa, lived many years in Egypt and spoke Arabic. We chatted about her mentor, the late Joseph Campbell, before she proudly showed me the art books she publishes under her own imprint. Henry runs her small, nonprofit business from a home office.

By contrast, Louisville's biggest business and its international renown stem from the elegant Kentucky Derby--"the greatest two minutes in sports"--the jewel in the Triple Crown of championship races (followed by Maryland's Preakness and New York's Belmont). On the first Saturday in May, the 1.25-mile race is run by three year-old colts at Churchill Downs, an English-style racetrack developed (after the Civil War) to market horses bred on Kentucky stud farms.

While the races generate big earnings ($18 million wagered at the track, $100 million bet on the Derby around the world), a winning horse commands huge breeding fees throughout his life. A Triple Crown winner is immediately retired to be sold at auction, where he may fetch up to $60 million: he is mated for his bloodlines about 60 times a year for the rest of his life. A Derby winner can thus sire more than a thousand thoroughbred horses and bring in millions on the strength of his winning performance.

Racehorse owner Roanne Victor, another enthusiastic Louisville lady, accompanied us through the interactive Derby Museum, where films of historic races are shown and Derby facts and trophies exhibited in a user-friendly manner. A stables tour provides a "backside" look at the daily life of horses, jockeys, and trainers.

Every year, AT's international visitors and local notables mingle at one of several celebratory dinner parties at a Louisville mansion. This year I was invited to the stately home of the Reverend and Mrs. Alfred Shales III. Mrs. Shales is a media heiress. As major art collectors, the couple have built their house to accommodate their art: a museum-like abode filled with paintings, sculptures, murals and valuable objects including an intriguing visual of Mahatma Gandhi. The dining room opened onto a stunning indoor swimming pool; an enormous wax sculpture hung over the dining table from the cathedral ceiling. The host and hostess sailed through their cavernous, ultra-modern home chatting with guests who had come to Louisville to see--what else? New American plays, of course.