Of the actors slated to star in Jeremiah Terminator LeRoy when Justin Kelly first got the production’s wheels turning in 2016, only Kristen Stewart saw it through to shooting. She plays Savannah Knoop, a young woman who posed as the invented literary persona JT LeRoy in the early 2000s, and thank the gods of cinema she stuck around. A fascinating synergy runs both ways between Stewart and the unlikely story of Leroy’s ascent to stardom in the publishing world. The actor’s intensively documented public life adds one more layer to a film that already has a lot on its mind regarding celebrity, constructed identity, gender and authenticity.

Both Stewart and LeRoy, a 19-year-old street kid created by Knoop’s sister-in-law Laura Albert (Laura Dern) as an avatar for her writing, have appeared to be uncomfortable with their fame. Each resisted the attention heaped on them, which only made the public hungrier for details. They’ve toyed with androgyny, using short-cropped haircuts and loose, body-masking clothing. And they each, in their own way, made a career of pretending. Stewart has described herself as a bad liar in interviews, suggesting that honesty paves the way to summoning truth in a performance. Laura and Savannah are united in the belief that a lie from the heart can be more real than a reality foisted on them by fate. The main difference is that Laura and Savannah just played it a bit faster and looser with their ethics.

Facebook Twitter Pinterest Manipulation … Jim Sturgess, Kristen Stewart and Laura Dern. Photograph: Allstar/Buffalo Gal Pictures

Dern plays Laura as a master manipulator, who can talk anyone into anything with the right melange of new-age platitudes. (“I felt JT leave my body and enter yours!” she says, convincingly enough for Savannah’s satisfaction.) When her lover/bandmate Geoff (Jim Sturgess) introduces her to his sister, Laura immediately recognises the ideal collaborator in Savannah, a lump of clay she can mould in an image incompatible with her own.

She earns the girl’s trust by sharing juicy moments from her past – work on a phone-sex line that taught her how to be someone else; the period she was 100lb heavier – and assumes her position as puppetmaster. It starts innocently enough, with Savannah donning a wig and shades for an author photo to accompany an article, but matters quickly spin out of control. Laura kept an eye on her alter ego by posing as LeRoy’s British handler Speedie, feeding the disguised Savannah responses to inquiries. But by the time an Asia Argento stand-in named Ava (Diane Kruger) has launched a multi-million-dollar film adaptation of a LeRoy-credited novel, both Laura and Savannah have got in far over their heads.

Facebook Twitter Pinterest Hiding away … Kristen Stewart in Jeremiah Terminator LeRoy. Photograph: Allstar/Buffalo Gal Pictures

While in LeRoy mode, Savannah behaves not unlike the way Stewart did during the Twilight press tours when she was swarmed by journalists intent on worming their way into her private life. It’s only when she starts to sever her marionette strings, making remarks not preapproved by Albert and striking up a romance with Ava, that their fragile success starts to fall apart. Their arguments and the exposé that follows give way to the film’s most intellectually substantive bits – debates over the limits to which anyone can remould their sense of self. Does Laura’s troubled life story have less value depending on who’s telling it? Can incidental good, expressed via an anonymous boy who tremblingly says that their work saved his life, validate a lie told for personal gain? Was the joke really on the preening upper crust who fell over themselves to praise an image? Director Justin Kelly doesn’t come down too hard on either of his subjects, acknowledging that there are few clear-cut answers.

Savannah and Laura’s stories had happy endings. They each parlayed their notoriety into careers, the irony being that they had to forge an ersatz life story to make their own life stories interesting to the literati. All of which speaks to the matter at the heart of Kelly’s theoretical tangle: our unwillingness, inability, or simple lack of interest in viewing the artist independent of the art. JT LeRoy may have been an elaborate fib, but Kelly finds a genuine pearl of wisdom in the web of deception.

• Jeremiah Terminator LeRoy has premiered at the Toronto film festival