Southern Italy is getting recognition for its well-priced, well-made wines. Over dinner at the remarkable Villa Matilde, one enthusiast learns more.

I've been complimented on my wine choices at restaurants only a handful of times. (Maybe it's my tendency to hunt for bargains.) But one of those times was when I first tasted Falerno at Manhattan's I Trulli. At $28, it certainly wasn't expensive, although it was far from the cheapest bottle on the list (which gives you an idea of how un-New York this restaurant's wine-pricing policy is). This rich, ripe, generous red was incredibly smooth and concentrated. Made from two highly obscure and hard-to- pronounce grapes, Aglianico and Piedirosso, by a winery called Villa Matilde, in Campania, Italy, it haunted me for days. How could a wine that cost so little taste so good?

When I recount this story several months later to Villa Matilde's owners, Salvatore Avallone and his sister Maria Ida Di Simone, they seem pleased, if surprised. "When most Americans think of great Italian wines, they think of expensive wines from Piedmont and Tuscany, like Barolo and Brunello, not the wines of southern Italy," Salvatore says.

Located about 40 miles north of Naples, Villa Matilde is very much a winery of the south. Its vineyards are set in the Massico hills, which surround the Roccamonfina volcano; the sea lies just over three miles away. A grove of lemon trees stands in the center of the estate, where the winery's dogs seek shelter from Campania's near-constant sun. At one time, Salvatore says, they had 42: "People just kept bringing dogs to us." The buildings at Villa Matilde are roofed in red tile, their walls covered with flowers, making it seem more like a small, immaculate Mediterranean village than a commercial winemaking operation.

Villa Matilde produces about a dozen wines (though only six in any quantity) with names few outside the south would recognize--Falerno, Falanghina, Aglianico--at prices not many in the north can match. But it isn't only that these wines are affordable. The day I arrived, Salvatore received a fax from Gambero Rosso, Italy's most influential wine magazine, informing him that his flagship red, Vigna Camarato, had won tre bicchieri (three glasses). "It's like a restaurant winning three Michelin stars," he says.

This is the sort of recognition that Salvatore and his sister have been working toward for more than 20 years, not only for Villa Matilde but on behalf of all southern Italian wines. Until a few years ago, most connoisseurs dismissed these wines altogether as high in alcohol and short on finesse. Today, Campania is known for the cult wine Montevetrano, a Cabernet blend (the 1996 received a 94 from critic Robert M. Parker, Jr.), as well as more traditional wines, like Fiano di Avellino and Greco di Tufo, from such producers as Mastroberardino and Feudi di San Gregorio. Outside Campania, wineries like Argiolas in Sardinia and Cantele in Apulia are also gaining renown.

Still, Salvatore believes that a rise in the region's reputation may take another generation. "My sister and I dream that our children will become the Gajas of the south," he says, referring to Angelo Gaja, who put Piedmont on the world's wine-buying map. Yet I wonder if this is a distinction he wants for himself but is too modest to acknowledge. For Salvatore is a singularly modest man.

It would be foolish, however, to mistake his modesty for a lack of confidence. After all, confidence was necessary to build a winery around Falerno, which had become synonymous with the worst sort of commercial stuff. Indeed, the exceedingly chic Maria Ida recalls being thrown out of more than one restaurant when she revealed that the wine she was selling was Falerno. "Until they tasted it, of course," she says, laughing.

This wasn't always the case. In fact, Falerno was once considered the greatest wine in Italy--some 2,000 years ago, during the time of the Roman Empire. That was what led Salvatore's father, Francesco Avallone, to buy Villa Matilde. Francesco, a prominent Naples lawyer and scholar of Roman law, "practiced what I call archeology enology," Salvatore says. "He spent years reading about the history of Falerno, talking to people and looking at vineyards, until he finally found about 100 acres and decided to buy them." This was in 1960, when almost all the Falerno vineyards had been destroyed by phylloxera. Francesco named the winery after his wife, whom he had left behind almost every weekend in his vineyard quest. "I think he did it mostly to keep her quiet," Salvatore speculates.

Salvatore was studying law at the time. "I was the fifth- generation lawyer in my family," he says. But after seven years of practicing, he moved to the estate. His father was not pleased. A few years later, Maria Ida made a similar career change. "When Salvatore and I worked in Naples," she says, "every day our hearts were at Villa Matilde."

Maria Ida, who commutes from the city, manages the estate's Italian market and teaches cooking classes on the property. Salvatore is the winery's director, although he likes to say that he has "many part-time jobs," which require a great deal of traveling--and endless talking on the phone. (Even during our tour of the 1,000-year-old Etruscan tombs that border Villa Matilde's vineyards, he took a call.)

The two are supported by a sizable staff that since 1996 has included famed enologist Riccardo Cotarella as consultant. Cotarella's visits are often occasions for Avallone get-togethers, as Cotarella is not merely a consultant but a friend. When Salvatore reports that Cotarella has just signed two important Bordeaux châteaus as clients, his pleasure is as much personal as professional: "Imagine that! An Italian consulting in Bordeaux!"

For a recent gathering, Maria Ida and Villa Matilde's cook, Silvana Daniello, prepare a number of regional specialties, including a hearty white bean and winter squash soup and a wine-spiked beef stew. Over dinner, Salvatore reports that his father has finally become reconciled to the fact that none of his children were destined to devote their lives to law. (He has two other daughters; one runs the family's posh Parker hotel in Naples, the other is a microbiologist.) And what of Salvatore's and Maria Ida's children? "In the south we have two sayings," Salvatore explains. "One is that the first generation has an idea, the second builds on it and the third destroys it. The second saying, and a better one, I think, is that it takes three generations to make a great wine. Our children will have to decide which saying to follow."