The three novellas of his latest book, The Omega Force, explore post-September 11 paranoia. K&K follows a drudge at an insurance brokerage unravelling the mystery of an anonymous colleague posting menacing notes in the suggestion box. The Albertine Notes is cyberpunk sci-fi set in a bomb-flattened Manhattan; the surviving New Yorkers are afflicted by an epidemic of the drug 'albertine' that stimulates happy memories from before the blast.

In the title story, a retired government official becomes convinced his island sanctum is being invaded by 'dark-complected' foreigners. In Moody's view, the protagonists of the three novellas 'have a mania that induces them to interpret wrongly. It's the illness of the Bush administration to be constantly reading into things and imagining conspiracies around every corner.'

With his disaffected characters and hip style, Moody is sometimes grouped alongside Dave Eggers, David Foster Wallace, Jonathan Lethem and Jeffrey Eugenides as a generation of American postmodernists reacting against their realist forebears. But there is little conventionally cool about Moody. A slight man of 46, he wears a beige cardigan over a faded R.L. Burnside T-shirt. Off alcohol and nicotine (and sugar, caffeine and meat) he practises yoga and plays in a folk band.

Moody is an agnostic who goes to church because he loves ritual and feels 'you have to believe in something'. In 1997 he co-edited Joyful Noise, a collection of essays on the New Testament. 'I had a theory that the only way for the Left to have a cultural impact in the way it did of old was to reco-opt the Bible, which I felt had been hijacked by the Right.'

His debut novel Garden State (1992) examined the travails of aimless New Jersey teenagers. Moody checked himself into rehab halfway through writing it, aged 25, after suffering an alcohol- and cocaine-fuelled breakdown and hallucinating that he'd be punished for his transgressions by being sexually violated by a man. 'You can see that like a big fault line running through the book - the before and the after. I think it's a truly dreadful book, but it's emotionally really accessible and vulnerable and I admire that.'

Accustomed to writing while intoxicated, it took him six months after sobering up to write again. Returning to the church in which he was raised helped restore his mental health. Lacking moderation skills, he never drank again. 'There wasn't some halcyon period where I could have one or two drinks and be witty at a party. I'd have six or eight more and try to f*** other people's girlfriends. I was sometimes so drunk I couldn't read what I was typing,' he says. Drying out made him a better writer. 'Emotionally you can't really understand other people when you're drinking. There's always this simulated quality to the characters of people with advanced alcoholism.'

Repeatedly talking about his month in a psychiatric hospital while promoting The Black Veil was 'like a full-on trip through hell', which made him sometimes regret publishing the book. Digressive and claustrophobically intense, the memoir polarised critics and led the notorious literary hitman Dale Peck to dub Moody 'the worst writer of his generation'.

Moody read only the first paragraph of Peck's screed, which sparked an international debate about the ethics of book reviewing. Yet while he has never spoken publicly about Peck, Moody is quick to slap down the charge that writing a memoir at 40 was premature and self-indulgent. 'Where's it said that you have to have a lot of events to describe to write a memoir?' The September 11 attacks didn't stir him to change the closing lines, which he stood by on tour: 'To be an American, to be a citizen of the West, is to be a murderer. Don't kid yourself. Cover your face.'

Moody traces his tangled and experimental style to Purple America (1996), about an alcoholic lay-about attempting to care for his dying mother. 'When I was writing the short, declarative sentences of The Ice Storm or Garden State it was because I thought I had to. I felt people missed the strain of feeling in my work because I come from a culture that doesn't express its emotions directly very often. So I decided with Purple America to write a book that would be almost operatic in its ambition to display feeling,' he says.

The Ice Storm traced the moral decay of two Connecticut families and was made into an acclaimed film by Ang Lee. That it remains his most famous book is 'Hollywood's fault, not mine', Moody says, dismissing it as an apprentice work. 'There's not a sentence in it that I would memorise. It just doesn't sing.' He flirts with the idea of writing a sequel 'to get right what I got wrong'.

After The Ice Storm, some critics anointed Moody heir to John Cheever and John Updike, both known for chronicling the malaise of the suburban upper-middle classes. Moody finds the comparisons lazy. 'It typecasts me as a WASP writer.

I don't really bear, beyond having written one book about the suburbs, even a passing resemblance to them,' he says.

Moody's family was hurt but understanding about The Ice Storm. 'It may not be easy always but they recognise that writing is how I try to handle stuff,' he says, adding 'it's not really very fictionalised at all'. Moody's mother divorced his father, an investment banker, in 1970, creating a wound that Moody struggled to resolve even as an adult. 'For some people, it just takes it out of them. My brother and sister felt less aggrieved by it than I did.'

As an undergraduate at the Ivy League Brown University, Rhode Island, he was taught by postmodern novelists Robert Hoover, Angela Carter and John Hawkes. Lazy and drug-addled, Moody doubts he made an impression, but all three teachers meant a lot to him. He recalls Hawkes' 'avuncular, sweet, generous aspect' and Carter's playfully abrasive manner. 'On the first day, the class was over-enrolled. She basically got it down to 14 by scaring people out of the room. Some guy raised his hand and said, 'Well, what's your work like anyway?' She said, in her mild-mannered way, 'My work cuts like a steel blade at the base of a man's penis.''

Moody also took courses in semiotics and developed an appetite for post-structuralist jargon. 'The density of it was so aggressive. I love [Jacques] Derrida's long, tangled sentences. I liked its rebelliousness, its unwillingness to compromise.

I like marginalised, ambitious discourses.' Moody's fondness for italicising in unexpected places suggests Derrida's influence, but he attributes it to Austrian novelist Thomas Bernhard ('a great italiciser').

Moody's windy sentences reflect his attempt to pin down elusive reality. 'My experience of language is that Lacanian experience of constantly wanting to capture something in prose that I can't

get to. So there's this excess of words and clauses and paragraphs. 'Shambolic' to me is a term of

great praise.'

He remains opposed to forms of conventional realism that presume reality can be captured by language. 'Realism, especially insofar as it relies on epiphany and formulaic structure, is politically dubious.

If literature is not trying to move to a new way of thinking about how we might describe life then it's just cooperating with what is, and what is in this country is hard to stomach.'

Yet in the title short story of his collection Demonology (2001) Moody abandons all artifice, writing about the death of his elder sister, Meredith, from a seizure at 38. 'I should fictionalise it more,' the narrator writes. 'I should conceal myself. I should consider the responsibilities of characterisation.'

Moody wrote the story in the two months following Meredith's death. 'Demonology is what it looks like - a perfectly realistic story.'

He kept using his sister's photograph of him on his books until he'd aged so much it looked absurd. 'It was hard for me not to have her name on the book jackets any more.'

He became heavily involved with Meredith's children and subsequently decided to marry his partner, environmentalist Amy Osborne, and eventually have children of his own. 'I'd been until then too preoccupied with my own trajectory as a writer to think much about kids.'

Moody's shift towards gazing outwards at the world rather than inwards at himself will reach a new stage with his next novel, partly set on Mars. It will be even more dystopian than The Albertine Notes, Moody says, but he's cheerful because of - not despite - his despairing outlook. 'My belief in the exploitative nature of human psychology frees me to feel good about things. I expect the worst of people and institutions. When they do not perform to type, I'm surprised and delighted.'

Author's bookshelf

Rings of Saturn by W.G. Sebald

'It's not like anything else on Earth. It has no distinct characters, no plot and very little dialogue. It's just organised around place and memory. It's passionate in a really German way, which is to say the gradations of feeling are

very faint.'

Labyrinths by Jorge Luis Borges

'A book I go back to again and again for its imaginativeness, its sheer sense of play and its excitement about literary history and ideas.'

Break it Down by Lydia Davis

'She's an incredibly beautiful prose stylist, maybe the best prose stylist working in American fiction today. She has a really incisive understanding of rhythm.'

To the Lighthouse

by Virginia Woolf

'Woolf is the great modernist thinker about language and psychology and this is my favourite book by her.'

Pale Fire by Vladimir Nabokov

'Pale Fire is an annotated poem, essentially. It's full of satire about the academic world but it's also so compassionate about these crazy characters.'

Writer's notes

Genre: Postmodern fiction

Latest book: The Omega Force (Faber & Faber)

Current project: A new novel partly set on Mars

Age: 46

Home: Brooklyn, New York

Family: Married to environmentalist Amy Osborne

Other books: Garden State (1992), The Ice Storm (1994), The Ring of Brightest Angels Around Heaven (1995), Purple America (1996), Joyful Noise: The New Testament Revisited (1997), Demonology (2001), The Black Veil (2002), The Diviners (2005)

Other jobs: Creative-writing teacher, publishing assistant, seller of audio-guides at an art gallery.

Quotable quotation: '... he had once soaked his penis in milk in an effort to get his housemaster's cat to have congress with him - her tongue was like sandpaper.' - from The Ice Storm, on an adolescent protagonist

What the papers say: 'The writing is entertaining throughout and it's worth buying the collection for

The Albertine Notes alone.' -

The Independent on The Omega Force