Udo Kier spent the final moments of the 20th century sitting in a wheelchair and wearing a blond wig, in someone else’s garden in Los Angeles, gazing up at the Hollywood sign. He had written a film about a paraplegic transsexual telephone sex worker, and was directing himself as the lead – but he was also worried the world would end as the new millennium dawned. “I thought, if something’s going to happen, maybe I’ll be a part of it, maybe the Hollywood sign will explode,” he says now. “But nothing happened. I have the material, though.”

Days into the new year, he abandoned the film, the personal financial costs too high, but he hopes to return to it. He even performs some of the script for me, channelling his inner phone sex worker to purr: “I’m blond, I’m shaved everywhere … yessss.”

It is at once creepy and alluring – a combination the German-born Kier excels at. Directors often tell him that only he will do, writing roles specifically for him. He has been a cult darling since his breakout in the 1970 horror Mark of the Devil, and rarely strays from the absurd. Simultaneously smouldering and sinister, early on he was described in the press as the most beautiful man in the world. Today, at 74, his green eyes are no less powerful.

A Nazi piece of work: Udo Kier as André Toulon in his latest film, Puppet Master: The Littlest Reich

“OK, I make myself comfortable, and let’s go back in my life,” he says, sinking into an Eero Saarinen womb chair in his Palm Springs house, which he converted from a modernist library. It’s 11am on Saturday, but he has been up since 6.15 to walk his dog Liza, named after Liza Minnelli. Twenty-five minutes away, he has a five-acre ranch featuring a life-sized plastic horse named Max von Sydow. “I’m a totally desert person,” he says. “I’m always happy when I come home.”

Which isn’t often. Kier has starred in more than 200 films since 1966; last year, he acted in eight. This month sees the release of Puppet Master: The Littlest Reich, a grisly reboot of the horror franchise about nasty toys doing nasty things. Kier appears at the start as the puppet master André Toulon, continuing the Third Reich’s work in Texas. It’s a classic Kier cameo: he turns up at a bar, orders soda water, for which he has brought his own lemon, squeezing it ominously, looking like one of the Nazis from Raiders of the Lost Ark, post face-melting. “I like the film, it’s very brutal,” he says. “The puppets are really evil.”

Kier in 1979. Born in Germany towards the end of the war, he now lives in Palm Springs, California. Photograph: Ullstein Bild via Getty Images

That is because the film is written by S Craig Zahler, director of the notoriously graphic Bone Tomahawk and Brawl in Cell Block 99, who summons Kier when he needs fuel for his nightmares. In the latter, Kier’s character terrifies Vince Vaughn’s prisoner by telling him an abortionist will clip the limbs from his wife’s unborn baby. Zahler will rely on Kier once more on the upcoming Dragged Across Concrete, casting him as a shady menswear retailer who helps out Mel Gibson’s crooked cop. But Zahler is just one of many film-makers to repeatedly employ Kier: Rainer Werner Fassbinder, Gus Van Sant and Lars von Trier have all directed him multiple times.

Kier loves this. In the past, he “didn’t like the word family, because I didn’t have one,” he says. He is warming to it now, though. His father had left Kier’s mother before he was born, in bomb-ridden Cologne in 1944. “When you don’t have a family, you create one,” says Kier. “I only have a few friends and I consider them, now, as my family.”

With Katrin Sass in Oskar Roehler’s Lulu and Jimi (2009). Photograph: Kobal/Rex/Shutterstock

Fassbinder was an early friend. The director was 15 when he met a 16-year-old Kier; both would frequent a “working-class bar” in Cologne at the weekend. They were minors, so they sat there drinking Coca-Cola, “looking at people. There was Rita, the first transvestite I’d ever seen. There were truck drivers, and secretaries in glasses. We were only allowed there till 10 o’clock, so, at 10, the owner would scream: ‘Rainer, Udo: out!’” Years later he would make four movies with Fassbinder. “I’m drawn to people who are free in their way of making films,” he says.

Kier moved to London to study English in 1965, hoping to find clerical work. Despite no acting aspirations, he was spotted and cast in a comedy short, 1966’s Road To Saint Tropez, then was discovered time and time again: Andy Warhol’s director Paul Morrissey met him on a plane and cast him as Frankenstein, and then Dracula; Van Sant, who had loved Kier in those roles, met him at the Berlin film festival in 1986 and offered him his first American role, in the street hustler drama My Own Private Idaho. Shooting it in Portland, Oregon, Kier immediately bonded with River Phoenix who, as the narcoleptic gigolo Mike, was method acting, referring to Kier as his character Hans, demanding he pay for everything.

A muse for Andy Warhol: as the vampire count in Blood for Dracula. Photograph: Rex/Shutterstock

One night, Phoenix asked Kier to come out with him and find some genuine gigolos on the streets, for research. Phoenix wore sunglasses, hanging back while Kier made contact; they had arranged that Phoenix would kick him when one piqued his interest. “We went to a group on a corner, where the real hustlers were. I talked to a few boys and River kicked me. So I said to the boy: ‘Look, I don’t want anything from you, but I’ll pay you some money, let’s just have a drink.’ And we went to a bar and River sat in the corner and I interviewed the boy: ‘What was the worst thing you had to do for money,’ etc. River wanted to know what was going on.”

Kier makes the most of his smaller roles, bestowing his characters with bizarre idiosyncrasies. He brought a suitcase that he had found at a flea market to the My Own Private Idaho shoot. He thought Hans could have it with him at all times for no particular reason; Van Sant agreed. In Von Trier’s Melancholia, the director told him to communicate that he didn’t want to interact with Kirsten Dunst’s character, so he walked around with his hand in front of his face. In Werner Herzog’s My Son, My Son, What Have Ye Done, he reprimands an ostrich for stealing his sunglasses. “When I have a part that isn’t the leading part, I want to act in a way that people remember,” says Kier. “Otherwise, what is the point?”

• Puppet Master: The Littlest Reich and Dragged Across Concrete are in cinemas from 19 April