(FORTUNE Small Business) – It's an 85-degree day in September, and Mike Wood of Wood Family Vineyards in Livermore, Calif., is inspecting his 14 acres of merlot grapes. He wanders between the rows of vines, sampling grapes to see if they're at the right balance of sugar and acidity to be harvested. The only thing odd about the scene is his outfit: a white button-down shirt, pressed slacks, and shiny loafers—clothes typically worn by men who make money squeezing numbers, not grapes.

Wood, 52, has worked in finance all his life, but ten years ago, with no experience in winemaking, he and his wife, Rhonda, invested $600,000 in what they thought would be a project for their retirement: 20 acres of vineyards in one of the state's oldest wine-growing regions. Instead of a hobby, winemaking has become a second career. (Mike still works full-time as CFO of a small company in Sunnyvale, Calif., that sells Trane air conditioners; Rhonda is on leave from her job as a US Airways pilot.) This past fall their boutique winery produced 44 tons of grapes, most of which were sold to other vintners, and 1,200 cases of wine that they produced and sold themselves—for roughly $315,000 in revenue altogether. "After the first harvest we saw that there was certainly a business opportunity," Wood says.

While winemaking as a second career is not a new phenomenon among baby-boomers, the Woods' story is noteworthy because of their location. Livermore Valley, 40 miles east of San Francisco, is not nearly as well known as Napa or Sonoma, but if you've ever quaffed California wine, you've probably tasted grapes from Livermore. The region offers conditions likened to those in France's Bordeaux region (gravelly soil, hot weather) and has produced quality grapes in almost every varietal as long as there has been wine in California. In fact, it was a Livermore vintner—Charles Wetmore—who helped put the state's wine on the map when his Livermore Valley Sauterne won a Grand Prix award at the 1889 Paris International Exposition, the first international gold medal for wine from a U.S. producer. The Wente Family Winery, founded in the Livermore Valley in 1883, developed a chardonnay vine that was eventually cloned and today accounts for about 80% of all chardonnay grapes grown in California. Many big-name Napa Valley winemakers, including Gallo and Kendall Jackson, have long bought Livermore grapes, in part because of their reasonable price. (They sell for about one-third the cost of grapes grown in more famous valleys to the north.)

In the 1960s and '70s, when the wine industry in Napa and Sonoma started booming, Livermore became urbanized. Thousands of acres of its vineyards were cleared for houses and freeways, and tax increases on land made would-be vintners pass up the region for the then-cheaper acreage in Napa and Sonoma. By the mid-1970s only eight Livermore wineries remained, and the region's reputation suffered. "Recognition of any wine region is based on the number of wineries in one area," says fourth-generation grower and vintner Carolyn Wente, 49, whose family has been instrumental in reviving Livermore's stature. "It became clear that if we were to stay and farm, Livermore needed a better balance between urban growth and agriculture."

To attract more wine-minded residents, the Wentes wanted to offer some of their property to newcomers. They worked with the local government for a land-protection program that would allow acreage to be sold in smaller parcels (making it more affordable) and mandate that a percentage of the lots be devoted strictly to agriculture. In 1993 the Wentes broke apart 200 acres of their land and divided it into ten 20-acre lots, planting vineyards on each. The Woods were the first to buy, in 1996, and by late 1999 every $600,000 plot had been sold. "Part of the appeal was knowing you weren't going to wake up to find bulldozers next to 50 tract homes," says Mike, who spent a few nights camping on the land with his sons, then 2 and 4, before buying.

Today the Woods are surrounded by upstart vintners hoping to become the next Robert Mondavi. Livermore now boasts 30 wineries (up from ten in 1999) and 5,000 acres of grapes under cultivation, a number the region hasn't seen since before Prohibition. With the exception of two large century-old wineries and the 120-acre plot owned by NFL commentator John Madden (who moved to the area in the late 1960s to coach the Oakland Raiders, and whose grapes are sold to other wine producers), almost all the vineyards are run by middle-aged professionals who have learned their trade at night and on weekends. They take enology and viticulture classes at the University of California at Davis or volunteer for grunt work at one another's wineries. "There's this tremendous enthusiasm and camaraderie coming from Livermore," says Nancy Tenuta, 48, a former day trader who launched the 20-acre Tenuta Vineyards in 2002 with her husband, Ron. "Then there's the quality of the wine."

Mike and Rhonda Wood met in 1984, just before Rhonda got her first big break as a pilot. The job required Rhonda to move from Northern California to Chicago, and the couple often went weeks without seeing each other. They reunited over weekend trips to Sonoma County, where they would stay at small, family-run wineries. A decade later, when Rhonda first visited Livermore Valley during a harvest festival, she was immediately reminded of the places they used to visit. "I was struck by how friendly and open the winemakers were," she says. "I was looking for something to do and convinced Michael that we didn't have to wait until we retired to own a vineyard." Once they moved in, she read wine trade publications, took extension classes at UC Davis, and hauled bins at neighboring wineries, learning the subtle growing and production techniques that affect the taste of the wine. (For example, grapes are picked before sunrise, when they are at their fullest and coolest—it will take less energy to cool them later.) Most of the information came from neighbors, including the Wentes, members of the Livermore Valley Winegrowers Association, and Linda and Earl Ault, retired scientists who operate Cedar Mountain Winery, two miles south of the Woods. "We're not like Napa, with that huge influx of money," says Linda, 61, who lent her hot-water, high-pressure cleaner to the Woods late one night so that they could clean their vats. "As an area, we can't afford to be self-centered—we all help one another."

After three years of bottling small batches using other vintners' facilities, the Woods built a temperature-controlled, 1,700-square-foot garage in 2001 that holds 100 barrels (6,000 gallons) during peak fermenting time. Now they can solve crises in their pajamas. "We have way more control," says Rhonda, who was also able to start experimenting with blends of different grapes. Rhonda sold 330 cases of cabernet sauvignon, merlot, and zinfandel that first year, yielding a small profit. (According to Mike, they've made money on every bottle of wine they've sold, and the winery broke even in 2003.)

Today Wood Family Vineyards makes seven different wines, all sold in gourmet grocery stores and upscale restaurants in Northern California. Like many of its neighbors, the vineyard is winning medals over more experienced producers at statewide competitions. Its 2001 zinfandel ($24) won a gold medal in the San Francisco Bay Wine Competition last year, as did its 2001 merlot ($22) at this year's Orange County Fair Wine Competition. But as Mike sees it, future growth lies in further diversification—branching out into varietals such as pinot noir and ramping up production. It's a goal likely to take another three to four years, as the Woods acquire vineyards in other regions that offer more space to hold a larger, more commercial winery—one that won't stand in his front yard. "Livermore's a small, urbanized area that's going to stay small when it comes to wine," says Vic Motto, an analyst with MKF Group, a wine consulting firm in St. Helena, Calif. He says he doesn't see Livermore as a serious threat to the more glamorous wine valleys further north, "but it's done a great job of producing good-quality wine."

Until its owners can afford a bigger operation, Wood Family Vineyards and the other new wineries in Livermore Valley will continue to pull in customers by offering what the bigger-production estates of Napa can't: access to winery owners, free tastings, and the chance to participate in the winemaking. (Nick Nardolillo, who runs the White Crane Winery, has annual stomping parties where guests get to help.) "We're not from these multigenerational wine families, which makes the bar a lot higher for us," says Mike Wood. "But people in Livermore are committed to being successful, and we have the drive to make it happen." Now all he needs is a good pair of workboots.