A street artist juggling with fire on the Largo do Chiado, in the Chiado district of central Lisbon. All over the city, an upstart generation is making up for lost time.

THE NEW YORK TIMES / Ed Alcock

For its 99th birthday last year, the decrepit Fabrica Braco de Prata factory complex underwent the real estate equivalent of a Saul-to-Paul spiritual conversion.

A manufacturer of weapons during the dark years of dictatorship in Portugal, the long-disused facility was reborn as Lisbon’s most ambitious new cultural venue. Guns and grenades were replaced by concert rooms, exhibition spaces, a sprawling bookstore, a cinema, a restaurant and various bars.

When the metamorphosis was complete, only one potentially troubling question lingered: Would Lisbon folk actually drag themselves to the city’s outskirts to visit an old industrial space with sinister associations and an unusually eclectic booking policy encompassing everything from electronic music to philosophical conferences to free-form jazz?

“It was a big risk,” said Michel de Roubaix, a resident artist who is the accordion-playing leader of a postmodern cabaret show at the center.

After all, this wasn’t a metropolis with a well-established avant-garde tradition like Paris or Berlin, but dowdy old Lisbon, a small Catholic city best known for inexpensive seafood meals, throwback cable cars and faded colonial architecture from Portugal’s long-vanished international empire.

But on a balmy night in March, the throngs filing into the complex made it clear that the city was more than ready for a bit of progressive bohemia in their remote corner of the Continent. Looking like the assembled listenership of some Portuguese version of National Public Radio, a buzzing crowd of tweedy academics, tattooed cool kids, bourgeois couples and bespectacled grad-student types fanned out to sample Fabrica Braco de Prata’s typically diverse offerings: a jazz combo, a reggae outfit, a Leonard Cohen documentary and a 1 a.m. after-party featuring DJs and alternative bands.

“It’s creative in all areas — theater, art, music, dance,” de Roubaix said of the venue’s appeal, clearly pleased by its unexpected success. “There’s a fast turnover of events and shows that keeps the place very dynamic.”

The same could be said for 21st-century Lisbon. Like the factory, Portugal languished for much of the 20th century on Europe’s geographic and cultural margins. From the 1920s until the 1970s, a repressive dictatorship smothered the nation, sending the creative classes fleeing to London and Paris and severely stunting any potential arts scene. Once the center of a global trade empire, Portugal sank into notoriety as Western Europe’s poorest nation.

As dust collected on Lisbon’s monuments — Roman theaters, Moorish edifices, Gothic churches, Baroque squares — the city became the Miss Havisham of Western Europe: a relic, forgotten and forlorn.

Now, Lisbon is avidly making up for lost time. All over the city, an upstart generation is laying waste to the sepia-toned stereotypes and gleefully constructing edgy and forward-looking ventures amid the time-worn monuments and quaint cobbled lanes.

“I remember being a kid and thinking, ‘Nothing happens in Lisbon. Why should we have to go abroad to see stuff happening and new stuff and to get inspired?’ ” said Nuno Pinho, 33, co-owner of a gallery called In-Cubo that opened last year. “Now there are so many things happening in Lisbon that you can’t get to everything — concerts, exhibitions.

“It is not an old-fashioned city where the women still carry fish on their heads.”

A former antiques store, In-Cubo is devoted to graffiti and other contemporary urban art forms. Similar renovations are taking place throughout the neighborhood, Principe Real, where dilapidated buildings are filling with concept stores, galleries and boutiques. A short walk away, a formerly louche strip club called Cabaret Maxime has reopened as a much-ballyhooed new nightclub for the city’s most unusual and alternative bands and performance outfits. Throw in Lisbon’s new world-class art museum, the Berardo Collection Museum, and a nascent fashion scene, and you have Western Europe’s fastest-rising cultural center.

And as the city’s cool factor has surged, so has its international profile. MTV Europe held its music awards in Lisbon in 2005. Last year, the influential London-based World Travel and Tourism Council held its annual convention there. If anything, the global spotlight seems likely to get even more intense thanks to a bevy of high-profile international festivals that have started in recent years, including the biennial ExperimentaDesign (next up in 2009) and the Lisbon Architecture Triennale (coming again in 2010).

On a balmy spring night, the gala 30th edition of Moda Lisboa, Lisbon’s twice-yearly fashion week, was in full swing. As a pulsating electronic-music beat filled the Estoril Casino ballroom, female models filed down a catwalk in futuristic black-and-gray garments suggesting haute-couture flight suits. Conceived by a young designer named Katty Xiomara, and known as “Metropolis,” the retro-futuristic collection owed a clear debt to Fritz Lang’s sci-fi film.

“In the beginning we didn’t have buyers, no fashion magazines, no journalists and only one modeling agency,” said Eduarda Abbondanza, the festival’s director, of the early editions of Moda Lisboa, in the 1990s. Next to her, Portuguese and Italian camera crews interviewed designers and local VIPs, many with champagne flutes and BlackBerrys in hand.

“Now we have fashion universities, and the world media is here,” she observed before shooting off a list of Portuguese designers now working senior positions in major international fashion houses: Balenciaga, Givenchy, Betsey Johnson.

As for fairy-tale waifs, coy Lolitas and escapees from the pages of Wuthering Heights, they flash their credit cards at Storytailors, certainly the most brilliantly strange new store to set up in Lisbon.

Opened in 2007 by the young design duo Joao Branco and Luis Sanchez, Storytailors isn’t so much a retail outlet as a cabinet of wonders where the ghosts of Lewis Carroll and the Brothers Grimm haunt the racks. The 18th-century warehouse brims with hoopskirts, corsets and elaborate lace getups adorned with richly patterned fabrics and kaleidoscopic colors.

Regally enfolded in a Baroque-style armchair, Branco, 30, explained that each year’s line of clothes began with a classic fairy tale, myth or legend, either Portuguese or international. The pair then hire writers to transform it into “twisted stories,” whose characters and experiences form the basis of various collections.

These literary-sartorial mash-ups, Branco said, have yielded “Narke: the History of a Dress” (about a Cinderella offshoot who “was cursed to travel through time,”) EUphyra (about “a Medusa who wanted to fly”) and “ELA (lice) and Ela (Queen of Roses)” (the tale of a schizophrenic girl that mixes elements of Alice in Wonderland and a Portuguese myth about “a queen that transforms roses into bread for the poor”).

“People often said when we started this project that we should go elsewhere, like London or Paris,” Branco said, smiling and shaking his head at the memory. “Still, we believed that there was potential in Portugal and that there was something happening in Portugal.”

So far, he’s been right. The pair’s dresses now hang in the personal wardrobes of the British singer Lily Allen and Madonna.

Across the street from the Mosteiro dos Jeronimos — a magnificent 16th-century Gothic monastery built at the height of the Portuguese empire — the year-old Berardo Collection Museum is Lisbon’s boldest 21st-century bid to recapture some cultural prominence.

As Prime Minister Jose Socrates remarked when the museum debuted last year, “In the past, the European route of modern art ended in Madrid. Now it ends here.”

It’s the kind of boast that one expects from a cheerleading politician, of course. But the goods on the walls easily back him up. The place is packed with iconic 20th-century works that seem transposed from the pages of coffee-table books and glossy art-history bibles. Picasso, Duchamp, Piet Mondrian, Francis Bacon, Richard Serra, Nam June Paik, Nan Goldin, Andreas Gursky — all the heavyweights are there, amassed over the years by the Portuguese business titan Jose Berardo.

On a lazy afternoon, couples and 20-something art students strolled through the airy white galleries, pausing to contemplate Salvador Dali’s White Aphrodisiac Telephone (topped with a lobster), while a guide held forth to a group of school kids about Andy Warhol’s Ten Foot Flowers canvas.

“Lisbon can now show the world that it can be a modern and contemporary art center,” said the museum’s director, Jean-Francois Chougnet, who formerly oversaw France’s vast network of public museums. Equally important, the Berardo can help introduce the wider world to Portugal’s many talented artists, Chougnet said.

He paused before a hallucinatory pastoral scene painted by Paula Rego, a Portuguese artist based mostly in London. Entitled The Barn, it depicted two young girls gleefully whipping the exposed backside of a milkmaid passed out next to a cow. “She’s already had two retrospectives at the Tate.”

Nearby, he motioned to some monolithic silvery blocks — like shiny refrigerators carved with grid patterns — by the sculptor Pedro Cabrita Reis. “He’s one of the favorite artists of Norman Foster,” he explained. “Foster has a huge collection.”

A few days later, as the Saturday afternoon washing fluttered on Lisbon’s wrought-iron balconies, a few dozen locals and travelers boarded a pair of buses outside the Museu da Cidade. Destination: a visit to the hot local and international artists of tomorrow.

Organized by Lisboarte ( www.lisboarte.com), a confederation of local galleries, the buses make two separate circuits around the city, ferrying curious parties and collectors to exhibition spaces that have coordinated the debuts of their new shows. These free tours, which happen about six times a year, are essential in a city with an expanding art scene but no concentrated gallery district.

In a darkened alcove of the Galeria Luis Serpa, a flickering video depicted a white lily slowly wilting and dying as a disembodied female voice read from The Inferno in Arabic.

One of the most prestigious galleries in Lisbon — along with the likes of Vera Cortes Art Agency and Cristina Guerra Contemporary Art — Lums Serpa has been a passionate advocate of Portuguese artists (including Cabrita Reis), championing their work in global forums like Art Basel and the Frieze Art Fair in London. The gallery has also shown creations by boldface foreigners like Chuck Close and Robert Wilson.

But its most ambitious project is yet to come. Next year, the gallery’s namesake owner is creating a “think tank” of international experts — urban planners, cultural impresarios — who will devise strategies for fully elevating Lisbon, at last, into a globally recognized cultural capital. A large part of his hope, he explained, is to lure creative people from around the world and “to create a cosmopolitan place where new talent can come and create in a new way.”

“I think Lisbon has a very, very good chance to be a transcultural platform for the creative industries in the future, because we have such good weather, food, unused spaces” and low prices, said Serpa, sporting an elegant tieless suit and eating a cookie. “Architecture, design, art, photography and literature will all be involved.”

A decade ago, such a pronouncement would have drawn laughs. On this day, however, the only sound was some well-dressed middle-aged women appreciatively questioning the video installation’s creator, a French photographer named Marie Bovo. Later in the year, Serpa said, the gallery intended to host exhibitions by artists “from China to Egypt to Iran to France to Spain.”

“Lisbon has the potential to become the most cosmopolitan and international city,” he said as the cadences of Dante’s masterpiece, in Arabic, mingled with his guests’ French, English and Portuguese chatter. “I really believe that.”