(FORTUNE Magazine) – "Pearls absorb the warmth of the oceans," wrote pearl merchant Takao Ohyama, "and reflect a mysterious countenance." If this holds for pearls in general, it is especially true of the "black" pearls of Tahiti. They are big, and with their gleaming colors--from iridescent green to midnight black--they are more coveted by some collectors than the white Japanese Akoya pearls or even the big, buttery South Seas pearls found in Australia and Burma.

The Tahitian pearl market might never have existed were it not for Salvador Assael, "pearl king" of the South Seas. Assael got into the pearl business at the end of World War II. His father, a trader, had bought thousands of Swiss watches and suddenly had no GIs to sell them to. The younger Assael observed that the Japanese were desperate for watches but had no cash. So Assael bartered for pearls instead.

Jumping into the business, Assael made a fortune over the next few decades in Japanese and Australian pearls. In the early '70s a friend urged him to consider the far-flung atolls of the South Pacific. Few had tried cultivating the "black-lipped" oysters that thrive on the coral reefs there, and no one thought that pearls of any color but classic white would be marketable. But Assael gambled, and when the first crop of Tahitian pearls matured, he flew to New York with several magnificent strands. Harry Winston, the Fifth Avenue New York jeweler, was offered an exclusive and took it. Meanwhile, Assael created a storm of publicity with full-page magazine ads proclaiming "A new gem is born."

Tahiti now has about 570 pearl farms, many of them small, family-run operations. The largest is owned by Robert Wan, son of poor Cantonese immigrants. "Pearls are my passion," he says. Looking at an oyster shell full of gleaming Tahitians, one understands.

Nearly all pearls today are "cultured," a process invented by Kokichi Mikimoto about 100 years ago. Here's how to do it: Get a young, healthy oyster (in Tahiti, a "black-lipped" Pinctada margaritifera). Take a polished bead, made from the shell of a freshwater mussel, and a slice of frilly oyster flesh (called the mantle) from a donor oyster. Gently insert the mussel bead and the mantle into the oyster's gonad sack (above). Give the oyster a few hours to recover (about 10% die at this point). Next, lower the oyster into the sea (right), rotating it frequently to encourage roundness in the pearl.

While underwater, the oyster should begin coating the mussel bead with concentric rings of opalescent nacre, a calcium carbonate deposit. At the end of two summers the oyster can be hoisted to the surface, the pearl carefully extracted, and another mussel bead inserted. Unfortunately, only 5% of the pearls obtained are of the finest gem quality. And unless the process is done with surgical precision by highly skilled technicians (most of whom are Japanese), the chances of success are almost zero.

Suspended by ropes underwater, Tahitian oysters (which grow to more than a foot across) spend more than 18 months feeding on microorganisms and creating pearls. The magnificence of the Tahitian pearl is drawn from its luster--the reflection of outside light--and also from its "orient," the inner fire created as light rebounds within the concentric layers of calcium carbonate. In Tahitians, this effect is often seen in their peacock-green iridescence.

But such pearls emerge only from healthy oysters. Pearl farmers spend about five years raising an oyster, from the time it is a baby "spat" until it produces its first pearl. Fortunately, the waters of French Polynesia are largely free of disease and of the water pollution that has devastated the Japanese pearl industry.

Peter Ringland, a Canadian, ran a charter boat business in Hawaii 20 years ago. One day he decided to sail the boat over to Bora Bora, where he met a local girl named Kiki, and he never returned. Today they have three children: daughter Vaea, 18, and sons Marama, 12, and Tamahere, 11.

Ringland found another love as well: black pearls. "He went into the atolls and saw his future," says his wife. Ringland secured a government license to raise oysters on 12 acres of water in Manihi, a coconut tree-fringed atoll enclosing a magnificent blue lagoon. He sold his boat and found a business partner in Rick Steger, a Ph.D. in marine biology from the University of California at Berkeley. They now produce 30,000 pearls a year and own five jewelry stores in Tahiti and Hawaii.

"It's a beautiful, natural product," says Steger, and the lifestyle has its obvious attractions. But he cautions that pearl farming isn't quite as romantic as it may appear. "It's farming, and you have to know what you're doing," he says. "It's a high-profit, high-risk business. You can stack up the bodies of the people who have come down here to try it and have failed."

But when it works, Tahitian pearls are very good to those who take the big risks. Robert Wan (above, at right) started his first pearl farm 20 years ago on a barren atoll, hauling food, water, and supplies in from Tahiti, 1,000 miles away. Now his company runs eight pearl farms and is known as the region's foremost producer. Salvador Assael (above, at left) remains the Tahitian pearl's most irrepressible advocate, distributing the best of the shimmering crop to retailers throughout the world.

From the 18 strands that Salvador Assael brought to Harry Winston's jewelry store in 1976, the Tahitian pearl market has grown dramatically. Now, hundreds of thousands of black pearls are exported annually from Tahiti.

Rising production has cut retail prices 30% to 40%, vexing Assael and others who would prefer to limit supply and sustain prices. The upside is that Tahitian pearls are no longer just for the superwealthy.

Meanwhile, jewelry designers are introducing jazzy strands of Tahitians that mix colors and shapes--heresy to traditionalists, for whom high quality means a strand of color-matched, perfectly graduated pearls. But it makes the Tahitians more contemporary and, again, more affordable. "When you try to match 23 or 30 pearls perfectly, the price goes up exponentially," says Patti Geolat, a Dallas jewelry appraiser. A strand of nine-millimeter to 12-millimeter Tahitians--perfectly steely gray--might cost $100,000, she says. But the same strand, mixing bronze, brown, pistachio, and other hues, might fetch $20,000.

Regardless of cost, Tahitians are catching on. "The amazing thing is that these pearls have become a notable fashion accessory," says John Block, director of international jewelry at Sotheby's, "when 25 years ago, no one had even heard of a Tahitian cultured pearl."