It is a testament to Martin Scorsese’s prolific gifts as a storyteller that he could venture so far out of his comfort zone – or what is perceived as his comfort zone – and respond with a film as mesmerizing and utterly confounding as Shutter Island.

Scorsese has descended into the criminal underworld so often, in movies like Mean Streets, Goodfellas and Casino, we need to be reminded from time to time that he isn’t condemned to stay there. (Remember After Hours?) Here, he explores a different underworld – the hellish confines of the Ashecliffe Hospital for the Criminally Insane, standing ominously in the dark Atlantic off Boston, which is just as inhospitable as it sounds.

It is there, in 1954, that federal marshals Teddy Daniels (Leonardo DiCaprio) and Chuck Aule (Mark Ruffalo) are sent to find an escaped patient who seems to have vanished leaving no trace. Teddy isn’t buying it. The hospital’s chief physician, Dr. Cawley (Ben Kingsley), is unfailingly polite but obstinately uncommmunicative – what’s he hiding? And why do the orderlies, guards and inmates all offer stories that sound poorly rehearsed?

These are the questions that keep Teddy awake at night, but not for long. By day, he is increasingly tormented by visions of his late wife (Michelle Williams), who insists her killer is hiding on the island. Then, when the lights go out, Teddy has visions of Dachau, where once upon a time he aided in the slaughter of Nazi death-camp guards.

The case of the missing patient conveniently solves itself, but we soon learn that Teddy has had another agenda from the beginning. Aware even before his lurid hallucinations that his wife’s killer is on the island, and convinced that doctors at Ashecliffe are performing sadistic experiments on their patients, he is on a dual mission: to find the man who destroyed his family, and to sink Cawley and his insidious right-hand man (Max von Sydow). Chuck indulges his new partner’s suspicions, but the strain between them begins to show.

Based on a novel by Dennis Lehane (Mystic River) and adapted for the screen by Alexander's Laeta Kalogridis, Shutter Island moves along briskly, ushering us deeper into a mystery that seems more complex by the minute. What we don’t realize, though there are subtle and significant clues, is that the rug is about to be yanked from beneath us. We are presented with two conflicting realities and asked to choose between them. It is a stunning turn of events that will leave audiences lost in thought long after they’ve left the theater, wondering what to believe.

Does it work? I think so. It’s not the sort of trickery you expect from Scorsese, who has never been confused with Hitchcock, but give him this: Playing by a new set of rules, he has mastered the game. At nearly two-and-a-half hours, Shutter Island is fascinating and breathlessly tense, even when Scorsese turns the screw and sets his grim little world (lusciously rendered by cinematographer Robert Richardson) on its ear.

An impressive cast helps bring Lehane’s twisted fantasy to life. Von Sydow is capable of making even the most innocuous pronouncement seem somehow sinister, and Kingsley, ever the voice of magisterial authority, is indispensable. In smaller roles, Jackie Earle Haley (Little Children) and Ted Levine (The Silence of the Lambs) contribute nicely to Teddy’s escalating paranoia in their respective roles as a tortured inmate and the hospital’s animalistic warden.

Yet this is DiCaprio’s ride, and he makes the most of it. He is at his furious best when he’s most agitated, as he was in last year’s underrated Body of Lies and earlier in Scorsese’s The Departed (2006). Teddy Daniels might not be his most satisfying role (though it’s certainly one of them), but he sinks his teeth into it with a ferocity that highlights his strengths. He is a man possessed, hunting demons, finding them and, finally, struggling to accept that they ever existed.