I could think of worse ways of launching a book than to haul in musicians like Martin Hayes and Dennis Cahill, concertina giant Noel Hill or singer Iarla O Lionaird. But that's precisely how I Could Read the Sky was welcomed into the world. They even rented the Shepherd's Bush Empire and got Sinead O'Connor in to sing a few songs.

The book is a collaboration between American writer Tim O'Grady and photographer Steve Pyke from Leicester. At the gigs/launches, Pyke's atmospheric black and white images (crumbling Irish landscapes, timeless portraiture) were projected large, while O'Grady read from his novella of an Irish emigre in London, between musical interludes. In Ireland, Mick Lally did readings as well.

Now the film version opens tomorrow at the IFC, directed by Nicola Bruce (Pyke's partner). Mick Lally was tied up in Glenroe while they were shooting, but at Neil Jordan's suggestion, novelist Dermot Healy took the central role - his big-screen debut.

It's a moody, mysterious, swimmy sort of film, but it catches you in the same odd way as O'Grady's first-person reminiscence of the scarred old Irish underclass navvie.

Laid up in bed of a blighted English morning, or sat in front of the two-bar heater, he re-runs memories of a lambent childhood in the west of Ireland; leaving and coming back and leaving again; a brief, ecstatic marriage, shattered by tragedy; and hard years labouring abroad - from the humiliation of sharing lodgings with pigs, to seeing his best friend fry when his jack-hammer hit a mains cable.

O'Grady is a friendly, languid, hyper-literate chap from Chicago who, at 49, has spent more time in Europe than the US. He has the odd bit of Hiberno in his sentence constructions, and even fondly affects a brogue if he's, talking about the music.

His grandfather was from Caherdaniel in Kerry, but emigrated to Chicago, where O'Grady's father was born. And although O'Grady later fell in with the Irish, he says: "It wasn't ancestor-worship, and I didn't grow up in an Irish-American environment, with dancing classes and stuff."

In fact, he never met his grandparents. "My grandfather bought a Republican Bond when de Valera was travelling through, and he and my grandmother spoke Irish to each other. But their children were very much meant to be American. So my father didn't know much about Ireland. He had a vague sense of identification, but by the time it got to me, it was just, like, baseball and the 1960s . . ."

While O'Grady was at university in Chicago, working for the Tri-Quarterly literary magazine, he met Jose Luis Borges's first English translator, Anthony Kerrigan, who had bought a house on Gola Island off Donegal, and who offered O'Grady the use of it. "So as soon as I graduated, I went there.

"I was just surviving, building fires and cooking and walking and writing letters and reading. And I'd go to the mainland once a week to get stuff. It cost almost nothing that summer, living out of a house with broken windows, concrete floors, a bed and a gas ring, no toilet, no plumbing, no nothing.

"The last people had left the house four years before, so it was just silence and ancientness, and the people I met were small farmers and fishermen. I'd never encountered anybody who spoke with that syntax, had that type of face, dressed like that or sang like that.

"It was a Gaeltacht, so lots of people from Derry and Belfast came on holidays, full of this wild, urban, war-fraught republican stuff - this urgent question of identity being worked out in bloodshed just over the border. I remember taking the bus down to Dublin that October, when the weather got too bad. And going through Strabane, the whole city seemed to be on fire.

"Soldiers got on the bus, really nervous with their fingers on the trigger, going through photographs of IRA suspects. They didn't know what they were doing, nobody did really. It took me years of reading and talking to people before I could write anything about that."

He settled in London with Inis Meain woman, Treasa Ni Fhatharta. They are now separated, but have a 19-year-old daughter, and Treasa has restored the Synge house on the island, in which she grew up. Treasa was a singer, so O'Grady ended up at a lot of London-Irish sessions, and was "always over and back" to Ireland.

O'Grady's first book came from working with Welsh filmmaker Kenneth Griffith, interviewing "old IRA people from the turn of the century through the Civil War".

Thanks to the political climate, the film was "suppressed" and O'Grady fashioned the research into the green-spangled but seriously fascinating Curious Journey: An Oral History of Ireland's Unfinished Revolution, with its acres of raw, heart-quickening interview material. Mercier Press reissued it two years ago.

For years, in London, O'Grady worked at various jobs: for the great publisher, John Calder, the Sugawn (a little Irish theatre in Islington), a film company. He was literary manager of the Bush Theatre, but quit in 1986 to finish his award-winning novel Motherland (1989). "It was a rather fantastical story about a very fat man, looking for his mother, who has disappeared. But in order to find her, he has to follow her traces through an ancient manuscript, and through second sight abilities. It's also in the first person, and he speaks in a very arcane, pedantic form of speech, which he has to divest himself of - it's all about discovering who he is."

Orality and memory certainly pervade I Could Read The Sky. Inspired by John Berger, O'Grady had decided that "the only way I could address an intersection of photography and Ireland was in terms of memory. I knew so many people in England who had emigrated during the 1950s. Also, I'd seen families in Ireland, where someone had disappeared into England, and the mark that left on them.

"You'd see these ads in the Irish Post - `Mary Doyle, last seen in the National Ballroom in Kilburn, or in such and such a town in Roscommon in 1967, has anybody seen her?' So I started interviewing people at pensioners' lunches at the Irish Centre in Camden and the Roger Casement Centre in Archway, trying to get into what they saw and felt, what their first impressions were of London, and what they'd left behind."

Meanwhile, Pyke and himself went on trips to Ireland, staying in Sligo with Dermot Healy, another influence. "In Force 10, Dermot did an interview with a farmer from Mayo and it starts out like a Frank O'Connor story, with the mother baking bread in the cottage, and then this image of Vietnam comes raging across the page from nowhere.

"He'd grown up in Mayo, he went to England and things went bad, so he took an assisted passage to Australia with his wife, and things didn't go well there either. So he enlists in the army and winds up in Vietnam, having to shoot an American soldier in the head who's been badly damaged by a bomb blast, and they don't have any morphine, and then he winds up back in Mayo on this farm...

"It was just this incredible piece of work, taken down by Dermot - and, I imagine, using the man's words verbatim - but somehow put together by a great stylist."

Martin Hayes contributed to the book's quasi-mystical references to music-making. The pair met in Chicago around 1990, when O'Grady's father was very ill, and he was returning a lot. "Martin and Dennis had a band called Midnight Court with a Japanese bass-player, playing bars with a drum machine on a pool table and nobody listening to them. Martin was playing an electric white violin. I saw a lot of him for about three years, and we had a lot of long conversations."

O'Grady rhapsodised about the musical highlight of the Empire gig in Shepherd's Bush - Hayes's half-hour set of tunes, from a bewitched Port na bPucai to a rejigged Pachelbel's Canon. "There were about 800 people there, from grandparents to Sinead's, Iarla's and Martin's fans. Martin can derange people with that playing. People were completely beside themselves."

O'Grady has had little to do with the film, which has done the international festival circuit, winning a major award in Slovakia. It now begins its commercial release in arthouse cinemas. O Lionaird's sountrack, now a Real World release, is yet another independent departure.

Since 1996, O'Grady has lived with his wife in Valencia in Spain, where he's been busy with fatherhood again - he has a two-year-old daughter. He's nearly finished another novel, again with an elderly male narrator who is probably Irish.

And himself? "I'd say I'm from Chicago. I have American and Irish citizenship, but I couldn't say I'm Irish. If you don't grow up in a place, you don't know the television programmes, the games, that way of being as a child . . ."

O'Grady is an only child, and his parents are now both dead. He enjoys returning to Chicago, where he still has friends and memories, but he says he has no strong attachment to it. "I guess I don't feel particularly from any place now . . ."

I Could Read the Sky is published by Harvill. The film, directed by Nicola Bruce and starring Dermot Healy, with cinematography by Seamus McGarvey and Owen McPolin, opens tomorrow at the Irish Film Centre, Dublin.