''I drive on the freeway every day,'' says a character in Sam Shepard's ''True West,'' ''I swallow the smog. I watch the news in color. I shop in Safeway . . . there's no such thing as the West anymore! It's a dead issue!''

For the play's two heroes - Austin, an aspiring screenwriter, intent on making it in Hollywood; and his brother, Lee, a desert rat who makes a living as a petty thief - the West represents two very different places. There is the old west, remembered mainly from the movies now, as a place where Manifest Destiny was an almost palpable notion, a place which promised a way of life that was as free as the land and the sky. And there is the new west, crisscrossed by highways and pockmarked by suburbs - the west that Hollywood tycoons and tract-housing developers built on the mortgaged dreams of the pioneers.

In ''True West,'' which is currently running Off Broadway at the Cherry Lane - a television adaptation will be shown this Tuesday on public television's ''American Playhouse'' - Mr. Shepard uses these two disparate visions of California not only to delineate the deep, contradictory craving in the American character for both freedom and the security of roots, but also to explore the gap between our nostalgic memories of the past and the bleakness of the present. Mr. Shepard himself says ''if I'm at home anywhere, it's in the west - as soon as I cross the Mississippi, I don't feel the same'' - but the idea of the West that he cherishes exists only as a memory now in the swiftly receding landscape; its romantic ideals, like the old american dream, vanished long ago with the frontier.

At 40, Mr. Shepard has won a Pulitzer Prize and emerged as the preeminent playwright of his generation. In an astonishing body of work - some 40 full-length and one-act plays, as well as poetry, short stories, and a volume of autobiographical sketches - he has put forth a vision of America that resonates with the power of legend. Surreal images bloom in his work - men turn into lizards; carrots and potatoes grow miraculously in a barren garden; an eagle carries a cat off, screaming into the sky - and strange, almost hallucinatory transactions occur. And yet the work remains firmly grounded in the facts of our own history and popular culture. Whether he is writing about rock-stars, old-time gangsters or the contemporary family, Mr. Shepard's voice remains distinctively American; his humor, dark; his language, at once lyrical and hip.

He has created a fictional world populated by cowboys and gunslingers, ranchers and desperadoes, but these characters all find that the myths they were raised on somehow no longer apply. Eddie the wrangler-hero of ''Fool for Love'' - currently playing at the Douglas Fairbanks - finds that he has nothing better to lasso than the bedposts in a squalid motel room. The Hollywood hustlers in ''Angel City'' look out their window and see not the fertile valleys of the Promised Land, but a smoggy city of used-car lots and shopping centers - a city waiting for apocalypse. And the old-time outlaws, who pay a visit to the present in ''The Unseen Hand,'' discover that there are no more trains to rob, that there is no place for heroics, that it is no longer even possible to tell the good guys from the bad.

What happens when these characters are forced to face up to the disparity between their lives and a heroic, if imaginary past, is almost inevitably violent. Indeed violence - the emotional violence of people shattering each others' dreams with verbal volleys, if not actual physical blows - is a commonplace in Mr. Shepard's insistently male world. ''I think there's something about American violence that to me is very touching,'' he explains. ''In full force it's very ugly, but there's also something very moving about it, because it has to do with humiliation. There's some hidden, deeply rooted thing in the Anglo male American that has to do with inferiority, that has to do with not being a man, and always, continually having to act out some idea of manhood that invariably is violent. This sense of failure runs very deep - maybe it has to do with the frontier being systematically taken away, with the guilt of having gotten this country by wiping out a native race of people, with the whole Protestant work ethic. I can't put my finger on it, but it's the source of a lot of intrigue for me.''

As the frontier receded, so did the old values and dreams, and in its wake, says Mr. Shepard, it has left a craving for belief. This hunger not only makes people needy for self-definition, but also, as in ''Curse of the Starving Class,'' susceptible to the promises of fake messiahs. ''People are starved for the truth,'' he says, ''and when something comes along that even looks like the truth, people will latch on to it because everything's so false. People are starved for a way of life - they're hunting for a way to be or to act toward the world. Take anything - I don't see the punk movement as any different from, say, the evangelist movement. They're both taken on faith - on one hand, faith in costume, and on the other, faith in a symbolic Christ.''

Indeed the search for a role, for a way of acting toward the world, remains one of the central preoccupations of Mr. Shepard's characters. Deprived of the past and any sort of familial definition - in play after play, fathers do not even recognize their sons - they try to manufacture new identities. They make up remarkable stories about themselves, but in shedding various costumes, poses and personalities, they often misplace the mysterious thing that makes them who they are.

''Personality is everything that is false in a human being,'' explains Mr. Shepard. ''It's everything that's been added on to him and contrived. It seems to me that the struggle all the time is between this sense of falseness and the other haunting sense of what's true - an essential thing that we're born with and tend to lose track of. This naturally sets up a great contradiction in everybody - between what they represent and what they know to be themselves.''

Victims of this contradiction, Mr. Shepard's characters live ''in at least two dimensions - one has to do with fantasy, the other with reality.'' Some of them have the ability to conjure up their fantasy life at will - as a result such mythical heros as Captain Kidd, Mae West and Jesse James make appearances on stage - while others are content to simply impose their fantasies on family and friends. In some cases, the characters actually undergo bizarre transformations on stage - they become, in a sense, who they think they are.

It is a peculiarly American notion, this sense that, like Gatsby, one can spring from the ''Platonic conception of himself,'' that identity is not something fixed by family or class, that one can grow up to become anything - the President or a movie star. It offers, on one hand, the promise of self- made riches and fame; and on the other, the perils of dislocation and anomie. Mr. Shepard, himself, talks of experiencing ''this kind of rootlessness I don't think will ever be resolved,'' and the facts of his own life suggest an ongoing process of self- creation and re-invention.

An army brat, whose family had migrated during his childhood from Fort Sheridan, Ill., to to Utah to Florida to Guam, the playwright spent his high school years in Duarte, a small town east of Los Angeles, where his father had an avocado farm. He was born Samuel Shepard Rogers - a name that ''came down through seven generations of men with the same name'' - and nicknamed Steve to distinguish him from his father. Years later, he would learn that Steve Rogers had been the original name of Captain America in the comics, but by then, he'd dropped the Rogers and the Steve and reincarnated himself as Sam Shepard.

As a boy, Steve Rogers had played at being a cowboy and a musician and a movie star - for days he practiced Burt Lancaster's grin in ''Vera Cruz,'' ''Sneering. Grinning that grin. Sliding my upper lip up over my teeth'' - and the Sam Shepard who later populated his dramatic world with these same mythic figures would also try on those roles in life.

The kid from California, whose exposure to cowboys had been limited to ''seeing Leo Carrillo, the Lone Ranger and Hopalong Cassidy in the Rose Parade,'' eventually went East where, as the singer Patti Smith recalled, he became ''a man playing cowboys''; he traded in his ''beat'' outfit of the 50's - a turtleneck, peacoat and dark pants - for a flannel shirt, straw Resistol hat and jeans. And while he'd never achieve the celebrity of his idols - Johnny Ace, Jimmie Rodgers and Keith Richards - he would also become an accomplished musician, joining the Holy Modal Rounders, a rock band, in the late 60's.

The movie stardom has come more recently: after several ''rural parts'' in ''Days of Heaven,'' ''Resurrection,'' ''Raggedy Man'' and ''Frances,'' Mr. Shepard last year played the test pilot Chuck Yeager in ''The Right Stuff'' - a role which not only conferred on him a kind of matinee idol status, but which also coalesced, in a single image, the archetypes of Western hero and space-age pioneer. Suddenly, he was up there on the screen playing one of those ''pilots with fur-collared leather jackets'' he'd dreamed about as a kid, and being acclaimed as the heir to Gary Cooper - strong, centered and coolly sexy.

Mr. Shepard's plays, of course, are filled with cinematic techniques and allusions to the movies, but they also evince a contempt for Hollywood as a place where people ''ooze and call each other 'darlings,' '' a place that perpetuates ''stupid illusions.'' People have a need for ''somebody to get off on when they can't get off on themselves,'' he wrote in ''Cowboy Mouth,'' but while many of his artist- heroes aspire to fill this role, those who ''go Hollywood'' usually end up being corrupted or destroyed. In ''Angel City,'' a witch-doctor named Rabbit is hired by a studio to work his magic on a film and he eventually goes mad. And in ''The Tooth of Crime,'' an aging rock star finds that fame has trapped him in his image, and he is soon tumbled from his pedestal by a mercenary newcomer named Crow.

Perhaps Mr. Shepard's own ambivalence toward the movie-business is best captured by ''True West,'' in which Lee, the desert rat who despises ''Hollywood blood money,'' exchanges identities with his brother, Austin, the successful screenwriter. Like Austin, Mr. Shepard works for the film industry and is in increasing demand as a star. And yet like Lee, he remains something of a renegade.

Having got his start in the Off Off Broadway movement, he has always eschewed the mainstream in the arts - he once called Lincoln Center ''a total bourgeois scene'' - and even as a struggling playwright, living on grants, tried to avoid publicity. Wary now of becoming one of Hollywood's ''promotional objects,'' he spends as little time as possible in Los Angeles; rarely grants interviews, and maintains that acting ''isn't a career - it's just something I do.''

''If you accept to work in a movie,'' he says, ''you accept to be entrapped for a certain part of time, but you know you're getting out. I'm also earning enough to keep my horses, buying some time to write and learning how to act - something that really interests me.'' ''When you put yourself in the position of being an actor,'' he goes on, ''you not only learn about your vulnerabilities, but also about the ways in which you're not vulnerable. Those are probably the most interesting areas. For me, it has to do with opening up, and there are certain dangerous areas that are very closed.''

He has always written for the actor, says Mr. Shepard, and some of his work actually owes a debt to the theory of ''transformations,'' an acting technique practiced by the Open Theater. Actors using this technique would swiftly switch personas from scene to scene - often without any apparent psychological motivation - and such early Shepard plays as ''Angel City'' and ''Mad Dog Blues'' featured characters who underwent just this sort of change. As Mr. Shepard once wrote in a note to actors, ''Instead of the idea of a 'whole character' with logical motives behind his behavior which the actor submerges himself into, he should consider instead a fractured whole with bits and pieces of character flying off a central theme. In other words, more in terms of collage construction or jazz improvisation.''

The analogy with jazz seems particularly well chosen, for Mr. Shepard's writing has clearly been influenced by his interest in music. The influence goes well beyond his use of rock and roll in the plays - ''Cowboy Mouth,'' ''Operation Sidewinder'' and ''The Tooth of Crime'' all featured musical interludes - but extends to the actual form and language of the plays. Mr. Shepard has practiced Jack Kerouac's technique of ''jazz- sketching with words,'' and the early plays not only demonstrate the sheer delight he takes in playing around with words, but also have the discursive, improvisational feeling of a jam session - they are less plays in any traditional sense than an extraordnary succession of emotional riffs. Many of these early works, Mr. Shepard recalls, had their genesis in a sound - he says he would suddenly ''hear'' a character speaking - or in a single image.

In a sense, it is easier to discuss Mr. Shepard's work in terms of music or the visual arts than it is in terms of old-fashioned literary sources. Certainly one can find the imprint of writers he admires in his plays - his gothic portraits of the family recall Faulkner; the menacing atmosphere, Pinter; the sense of absurd, Beckett. But the debt to popular culture - songs by the Rolling Stones, ancient Indian legends, science-fiction novels and old Hollywood movies - is equally pronounced.

In fact, what initially excited Mr. Shepard about the theater was its flexibility, the fact that it was a ''form where you could amalgamate all the arts.'' ''You can show film,'' he says, ''you can dance, you can incorporate painting and sculpture. For a renegade artist who hasn't found his niche, it's a way to engage all these things. It's very accessible and the rules are wide open.''

The atmosphere in which Mr. Shepard began writing during the early 60's nurtured these eclectic impulses. When he arrived in New York, the Off Off Broadway movement was just beginning, and playwrights, actors, painters, poets and musicians all seemed to inhabit an exciting new world. ''Everything influenced me,'' he recalls. ''There was a great make- shift quality to those days. It only existed for a few years, till Vietnam came along and everything shifted to a very grim perspective. But for a while it was like a carnival, a mardi gras - it made you feel you could do anything. Art wasn't a career or anything intellectual - it was a much more active, playful thing, a way to inhabit a life.''

Having had little formal exposure to theater in the past - the only ''audience events'' he attended as a boy were rodeos, Spanish fandango dances and basketball games - Mr. Shepard began writing plays with few preconceptions about what they could or could not be. Much of what was applauded as innovative in his early work - and also condemned as obscure - probably stemmed, he says, from simple ignorance. In those days, Mr. Shepard wrote extremely quickly - he finished ''Chicago'' in a single day - and rarely rewrote anything at all. He was also taking a lot of drugs at the time, and while he never wrote while ''stoned,'' he says that ''maybe certain experiences from all that fed into the work.''

In 1970, after a tempestuous affair with Patti Smith, Mr. Shepard left for England with his wife O-Lan and their 2-year-old son. It was during a three-year sojourn there that he first became aware that ''rhythmically I was an American - the way I talk, the way I walk, everything was American,'' and the realization seemed to galvanize his work. While living on meager grants in London, he completed ''The Tooth of Crime,'' a savage fantasy about two rock stars fighting for power and fame; and the play helped to consolidate his growing reputation on both sides of the Atlantic.

There had always been critics who complained that Mr. Shepard's earlier work was unwieldy and messy, and the playwright himself observes that he is ''a terrible storyteller.'' ''The stories my characters tell,'' he says, ''are stories that are always unfinished, always imagistic - having to do with recalling experiences through a certain kind of vision. They're always fractured and fragmented and broken. I'd love to be able to tell a classic story, but it doesn't seem to be part of my nature.'' With ''Curse of the Starving Class,'' written in 1976, and ''Buried Child,'' written in 1979, however, a certain change occurs - the writing has begun to grow more shapely and more naturalistic. Though the language is still idiomatic, the imagery still poetic, these elements are now grounded in narratives that demonstrate a new discipline and a more traditional approach to character.

''I wouldn't call it a development,'' says Mr. Shepard, ''though it's some kind of evolution. It has to do with moving inside the character. Originally, I was fascinated by form, by exteriors - starting from the outside and going in, with the idea that character is something shifting and that it can shift from one person to another. You had different attitudes drifting in and out from actors who are part of the ensemble. So in the past, it was the overall tone of the piece I was interested in rather than in characters as individuals. That sort of played itself out, and for a while I didn't know where to go from there. But then I started to delve into character and it came about pretty naturally.''

As Mr. Shepard began to take a more psychological approach to character, the plays also became less overtly epic and more personal. Whereas autobiographical material in the early plays was either abstracted - as in ''The Rock Garden'' - or mythologized - as in ''Cowboy Mouth'' - the later plays tend to deal more directly with details from Mr. Shepard's own life. ''Starving Class'' and ''Buried Child'' - which both depict families victimized by their fantasies and guilts - mirror the ''violent, chaotic family structure'' that the playwright knew as a boy; and ''True West'' touches upon his ambivalence toward success and his own complicated relationship with his father, who now ''lives alone on the desert.''

Such male relationships - between fathers and sons, colleagues and rivals - have tended to dominate Mr. Shepard's plays, and he acknowledges the special fascination that the psyche of the American male has always held for him. ''You don't have to look very far to see that the American male is on a very bad trip,'' he says. ''American women at least have the pretense of being involved in some kind of sisterhood, whereas men very, very rarely form a real strong connection with one another. With men I think it happens only very, very rarely, maybe with one or two guys in your lifetime - if you're lucky. It's like men have to have sport or drinking or something like that in order to have an exchange. Women don't seem to have that problem - they're willing to give people the benefit of the doubt. It always seemed to me that there was more mystery to relationships between men, and just now, it's coming to a territory where I'm finding the same mystery between men and women.''

Indeed with ''Fool for Love'' - a fierce two-act portrait of a couple, who may or may not be brother and sister - Mr. Shepard set himself a specific task: to ''sustain a female character and have her remain absolutely true to herself, not only as a social being, but also as an emotional being.'' ''I tried relentlessly to stick with that in the play,'' he says, ''and for my money it accomplishes what I wanted to accomplish. It really does sustain both sides of the issue. Neither one of them comes out heroic. They're just who they are.''

Having spent the last few months filming ''Country'', Mr. Shepard has had little time recently to devote to writing. This month, however, he plans to go to Boston to work with the director Joseph Chaikin on another theater piece; though they have nothing specific yet in mind, the project will no doubt resemble ''Tongues'' and ''Savage/Love'' - their previous collaborations, which combined music and poetry in a loose dramatic form.

One day, says Mr. Shepard, he would like to write and direct a film, and from now on, he also intends to direct all initial productions of his plays. As for the actual writing, ''everything is wide open - I don't know where to plunge.'' ''It's a hundred times harder than when I started,'' he says. ''For one thing, it becomes more and more difficult to write something surprising or in a new way because people now come with expectations - they expect it will be about 'the myth of America' or something. Once you've cracked the beginning, you're on a roll, but it gets more difficult to start. You've got to get rid of all the stuff in your head that you've done before in order to start off from ground zero, and for me, that's the only place to start.''