(FORTUNE Small Business) – Say "American Cheese" and most people imagine orange bricks or sticky, single-wrapped slices, or maybe something sprayed out of a can. In the past few years, though, that has slowly started to change. As with wine, chocolate, and olive oil, domestic cheese is becoming a gourmet item. Some experts now regard artisanal cheeses from small U.S. producers as on a par with the best cheeses from Europe. Skeptical? I was. So I traveled to California to witness the artisans in action.

I began my investigation by phoning Laura Werlin, 45, a San Francisco-based writer who devotes all her time to the subject. Her books, The New American Cheese and The All American Cheese and Wine Book--which recently won a James Beard cookbook award--are among the few to focus on domestic cheese. Her third, Great Grilled Cheese, comes out in September. "When people heard I was writing about American cheese, they thought I was writing about Kraft," says Werlin. "'Real' cheese people still look to Europe, but many are starting to learn there's great cheese here too."

The number of cheesemakers in the American Cheese Society, a group that focuses on the specialty market, has doubled in the past three years, to about 250. On July 21 the ACS will hold its 21st annual competition in Milwaukee--essentially the Super Bowl of fine American cheesemaking. In the contest's first year it drew about 20 entries. That number jumped to 425 in 2002 and 616 last year. (For the past four years Werlin has judged the ACS competition, tasting 100 cheeses in two days. With that kind of volume, the judges spit out each cheese into a bucket. It's gross, Werlin admits, but necessary.) In an attempt to boost tourism, dairy boards in the three main regions for artisanal cheese--California, New England, and Wisconsin--now offer maps of local producers. (For more information, see the "Tastings" box.)

With Werlin as my guide, I spent a day visiting four cheesemakers in Northern California. We began in Point Reyes Station, where we met Sue Conley, co-founder of Cowgirl Creamery. In 1994, Conley began distributing local handmade cheeses, many of which had never been sold outside the region. In 1997 she started making her own. "Our goal is to get people to understand where their food comes from," says Conley. "They can go out to Point Reyes and see the cows on the hillside, come here and see the cheese being made, and then have a sandwich with the cheese at the end."

Last August, Cowgirl Creamery's Red Hawk, a washed-rind (or "stinky") cow's-milk cheese, won Best in Show at the ACS competition. Ironically, Red Hawk began as an accident. Conley put a piece of English cheese into her ripening room next to a batch of her Mt. Tam, a triple cream similar to Camembert. Cheese mites, common to aged cheeses, leaped onto the white Mt. Tam, leaving it edible but with a brown, pitted look. Trying to salvage the batch, Conley washed the cheese in salt water and stuck it in the aging room. A month later it had developed a sticky red rind and a taste more complex than the Mt. Tam. Such creativity is distinctly American, Werlin says. In Europe cheesemakers often make one style of cheese for generations.

Cheesemaking is a subtle art. The flavor changes with the diet of the animals providing the milk, but also with the bacteria used to sour it and the rennet, an enzyme used to separate the milk into solid curds and liquid whey. The process is also labor-intensive, and at the artisanal level very little is mechanized. One person at a mass-market factory can make 2,000 pounds of cheddar in about an hour, and after ten days of ripening it's ready to sell. For Conley, 200 pounds of cheese requires two people and four to six weeks of aging. "It took us five years to reach profitability," says Conley. "And it was a hard five years."

For our second stop, Werlin and I headed to the Point Reyes Farmstead Cheese Co., where the Giacomini family makes nothing but blue cheese. Bob Giacomini, a third-generation dairy farmer, has been working his farm since 1959, but in the late '90s he faced a dilemma. "I was 60 and knew I didn't want to manage a dairy herd all my life," he says. "I said to my four daughters, 'Somebody's got to come back and start taking some interest in the farm or we're going to sell it.'" With careers in business, none of them wanted to milk cows, but when their father proposed a shift to cheese, three of them--Jill, Karen, and Lynn--jumped at the idea. They began in 2000.

Aiming to be profitable as soon as possible (they say they're on the verge), the sisters hired an experienced cheesemaker who had previously made Iowa's famed Maytag Blue cheese. "We have the benefit of the three of us doing sales and marketing," says Jill Giacomini Basch, 34. That may be why Werlin has noticed their distinctly tangy Original Blue on more menus than any other U.S. cheese.

Their operation isn't open to the public, but after we all donned hairnets and booties, Basch gave us a tour. Because of strict health codes, cheesemaking rooms are far from rustic. The metal and concrete rooms are humid, slightly sour-smelling, and impeccably clean. Peering into a 1,500-gallon vat, I saw thousands of half-inch-long spongy curds in a sea of yellow liquid whey. When a worker opened a valve, both curds and whey flooded down a ramp onto a table. While two men packed the curd into molds, whey gushed onto the floor and down a drain. In five minutes the men had made 72 wheels of blue cheese and set them to ripen in the aging room for six to eight months. In about three weeks blue veins will start to appear as the Penicillium roqueforti mold finds pockets of oxygen in which to grow. To encourage more veins, blue-cheese makers punch the wheels with needles. The more they punch, the bluer the cheese.

After sampling the Giacominis' cheese, Werlin and I drove up to Petaluma to meet Liam Callahan of Bellwether Farms. In 1990, Liam's parents, Cindy and Ed, started making sheep's cheese on their farm, something virtually no U.S. producers were doing at the time. Ed died in 1997, but Liam, 38, now serves as cheesemaker, and Cindy, 69, takes care of the 200-sheep herd. (They buy cow's milk from a local dairy.) Liam showed us his ripening rooms, with hundreds of wheels of Carmody, a mild, gouda-like cow's-milk cheese that is aged for four to six weeks. Dates pinned next to each batch show he was even making the stuff on Christmas Eve. For eight months each year, starting in June, he makes his sheep's-milk cheeses: San Andreas (named for the famous fault, which runs under his farm) and Pepato, a black peppercorn cheese. "Many people going into cheesemaking aren't realistic about it," Liam says. "It really is hard work." As Werlin and I return to the car, she seconds the idea. "I think Liam's arms are twice as big as the last time I saw him!" she says.

Inland from Bellwether, a plain white sign marks the entrance to the Joe Matos Cheese Factory in Santa Rosa. The Matoses have been making one kind of cheese here since 1976: St. George, a mild, cheddar-like cow's-milk cheese named for the island in the Azores where Joe and his wife, Mary, grew up. Working seven days a week, they make 4,000 pounds of St. George every month. (By contrast, Cowgirl Creamery produces 12,000 pounds a month, and Point Reyes, 25,000.)

About 20 visitors a day stop in to buy St. George at $5.50 a pound. "You could charge a lot more," Werlin tells them. A local supermarket sells it for $15.99 a pound. They shrug. "Until Suzie came in, we never sold cheese for more than $2.50 a pound!" says Joe Matos, 65. He means Sue Conley from Cowgirl Creamery, who began distributing their St. George cheese to chefs and gourmet stores in 1995. Until then they sold only to Portuguese Americans, who found them by word of mouth. What happened once Conley took their cheese? Says Joe: "These American people, they just go crazy!"

Twelve hours later Werlin and I returned to San Francisco, thoroughly stuffed. Werlin may eat cheese every day, but she also runs three miles daily. "Cheeses are meant to be savored in small quantities, not gobbled up as many Americans do," she tells me, just slightly after the fact. I look at the small cooler of cheese I've collected today. "Most of that will stay good for a year," she says. We'll never know. Three weeks later most of it was gone.