If for many reasons ''Don Quixote'' is the first modern novel, it is pre-eminently because of the different languages spoken in it. Characters in classical literature all spoke the same language. Achilles understands Hector; Ulysses can even speak to Polyphemus. But Quixote and Sancho speak two different idioms. Why? Because the characters are engaged in what the Spanish critic Claudio Guillén calls ''a dialogue of genres.''

There has been some dispute about whether ''Quixote'' is indeed the first modern novel. Ian Watt gives primacy to the 18th-century English novel, which was responding to the rise of a middle-class, book-buying public. André Malraux thought of Madame de Lafayette's ''Princesse de Clèves'' as the first because it initiated inner exploration of character. But I believe that ''Don Quixote'' really inaugurates what we understand modern fiction to be -- a reflection of our presence in the world as problematic beings in an unending history, whose continuity depends on subjecting reality to the imagination. Cervantes does it, as all writers do, in a precise time and space. This is Spain in the decadent reign of Philip III, a country that has conquered and plundered and built a New World in the Americas and returns, exhausted, to its native village in La Mancha with nothing but the memory of past deeds. It is also the Spain of the Counter-Reformation, where the Renaissance enlightenment brought to the court of Charles V by the Erasmist scholars had long been buried under the severe vigilance of the Inquisition and the edicts of the Council of Trent.

Cervantes knew his times. One of his novellas, ''El Celoso Extremeño'' (''The Jealous Old Man From Extremadura''), came under the censorship of the archbishop of Seville because two lovers ended up together in bed. Heeding the church warnings, Cervantes changed the finale. The couple, as in movies from the Hays Office era, sleep in separate beds. Cervantes was a disciple of a daring Spanish Erasmist, Juan López de Hoyos. If ''The Praise of Folly'' and its author are never mentioned in the vast libraries of ''Don Quixote,'' it is for good reason: it was too dangerous. Yet could not ''Don Quixote'' accept as its perfect subtitle ''The Praise of Folly''?

''Don Quixote'' has so many levels of significance that I can set foot on only a couple of them. The first is the dialogue of genres. Cervantes inaugurates the modern novel through the impurity, the mestizaje of all known genres. Often criticized for ignoring the requirements of the well-made novel (recognizable characters, expert plotting, linear narrative), Cervantes audaciously brings into his book, first and foremost, the dialogue between the epic (Don Quixote) and the picaresque (Sancho Panza). But then he introduces the tale within the tale, the Moorish, the pastoral, the Byzantine modes and, of course, the love story. The modern novel is born as both an encounter of genres and a refusal of purity.

Out of this meeting, Cervantes proposes a new way of writing and reading whose starting point is uncertainty. In a world of dogmatic certitude, he introduces a universe where nothing is certain. The place is uncertain: ''Somewhere in La Mancha. . . .'' The authorship is uncertain. Who wrote ''Don Quixote''? One Cervantes, ''more versed in pain than in verse''? A gentleman called de Saavedra, mentioned in the novel with admiration for his love of freedom? (Cervantes's full name was Miguel de Cervantes Saavedra.) Is the author the Moorish scribe Cide Hamete Benengeli, who discovers, by chance, an anonymous manuscript? Or is it the despicable Avellaneda, who writes an unauthorized sequel to ''Don Quixote'' (in real life, and in the novel)? Or could it be, if we follow this rich, fantastical path opened by Cervantes, that the author of ''Don Quixote'' is really Jorge Luis Borges, who wrote a tale called ''Pierre Menard, Author of the Quixote''?