This is a ravishing fairy tale/epic, and the best movie of the year.

It is passionately romantic — the story of two sets of star-crossed lovers who face enormous obstacles, within themselves as well as those imposed by the outside world. It is a thrilling adventure saga that includes a magical 400-year-old sword called “Green Destiny,” a warrior who must avenge the murder of his master, a handsome bandit, the spoiled daughter of a high-ranking official who dreams of the freedom to do what she wants, and the bitter villain who wants to destroy them all. It is dazzling, with breathtaking landscapes, gorgeous costumes, and magnificent cello music played by Yo Yo Ma. And it has, unquestionably, the most brilliantly staged fight scenes ever put on film, possibly the best that ever will be put on film.

Director Ang Lee is best known in the United States for indoor dramas about families struggling with their feelings and with societal constructs of reputation and honor: “The Ice Storm” and “Sense and Sensibility.” He has described this movie as “‘Sense and Sensibility’ with kick-boxing,” and that is indeed very apt. As in Jane Austen’s novel and his adaptation, this is the story of two women, one led too much by her heart, one led too much by her head, and of the men they love.

Michele Yeoh plays Yu Shu Lien, who runs a company that provides secure transport for shipments of goods to be sold. She is visited by Li Mu Bai (Chow Yun Fat), who has come to give his famous sword to Sir Te, a mutual friend, for safekeeping. Li has been a warrior-hero, using the Green Destiny sword to fight for justice. He is tired of killing and wants to retire to a life of meditation, but instead of enlightenment he has found “endless sorrow,” and that “something was pulling me back.” He has one unfinished obligation — to avenge the death of his master at the hands of a villain named Jade Fox. And it may be that there was something else pulling him back, his love, never expressed, for Yu.

At the home of Sir Te, Yu meets another guest, the pampered daughter of a governor named Jen Yu (Ziyi Zhang). Jen and Yu each dream of freedom. That night, the sword is stolen. Yu races after the masked thief to get it back. It turns out they have both achieved the highest levels of fighting skills, so advanced that they can actually defeat gravity, levitating effortlessly to float from rooftop to rooftop.

The thief has ties to Jade Fox. And Jen, soon to enter into an arranged marriage, has a secret love, the leader of a pack of desert bandits.

The fight scenes, staged by Yuen Wo-Ping (of “The Matrix”) are balletic masterpieces. Like the dance numbers of Fred Astaire and Ginger Rogers, they are both mesmerizingly graceful and more eloquent than dialogue. Jen takes on an entire restaurant full of attackers just for sport and spite. She twirls softly down from an upper story to the ground floor, just before she annihilates them with a blinding fury of fists and feet. Jen fights Lo (Chen Chang, the bandit leader who stole her comb, with a passion that allows them to open their hearts to each other. She fights Yu, the one person she thinks can understand her, because she is impetuous and proud, and because that is the only release she has in a world of constrictions and restrictions.

The story is told with great subtlety and power, giving it the quality of a myth or a collective dream. Yu reveals the identity of the masked thief by quietly allowing a teacup to slip out of her hands. When one person is able to catch it with a lightning-fast motion before it hits the floor, Yu knows that her suspicion was correct. When Li touches Yu’s hand for the first time, it is a moment of heartbreaking intimacy. The quest for honor and justice could be set in the old West, in ancient Greece, in medieval times, in a 1930′s San Francisco detective story, or in some Luke Skywalker-esque space fantasy. Its themes are enduring because they are inside all of us.

Parents should know that the movie features a lot of martial arts battles. Most are bloodless, but one character is killed when a blade is hurtled into his forehead. Major characters are killed, and one death could be interpreted as suicide. Although the women in the movie are treated with complete equality and are equal to or superior to the men in judgment and combat, one female character expresses bitterness that she was not permitted to train as a warrior. There is brief mild language.

Families who see this movie should talk about how we balance our heads and our hearts to forge lives that are grounded in honor and in love.

Families who see this movie will also enjoy seeing other movies starring Michelle Yeoh and Chow Yun Fat, but nothing they have done before comes close to this masterpiece. Families might also like to watch the director’s Sense and Sensibility to decide whether they agree with his assessment of their similarity.