This is what you must understand about the people who decide what will appear on your multiplex screens: Hollywood executives, as a rule, have no imagination. It could be the result of some unholy cocktail of too much sun, cell phone radiation and leather office chairs—or, more likely, the distilling effect of an industry that rewards not those who green-light good films, but those who green-light profitable films. Whatever the reason, studio bosses generally find themselves baffled by anything they can’t relate to something they’ve already seen before. That is why we see so many sequels, remakes and cannibalizations of foreign films: because those are things they can visualize selling. And because so many of these films are born out of a marketing plan rather than a creative plan, we who love movies justifiably approach them with fear and trembling.

Sometimes, however, someone gets it right. As burned as we’ve been by seeing something as sublime as Wim Wenders’ Wings of Desire translated into something as maudlin as City of Angels, there can still be bursts of inspiration. Screenwriter William Monahan and director Martin Scorsese have taken the 2002 Hong Kong thriller Infernal Affairs—already a crackling piece of genre work—and made it something even deeper and more resonant.

The basic premise remains essentially the same, though the setting has been switched to Boston. Colin Sullivan (Matt Damon) has risen through the ranks of the Massachusetts State Police, but unknown to anyone his loyalty is actually to local crime boss Frank Costello (Jack Nicholson), for whom Colin serves as a mole warning Frank of any investigation that might be getting too close. Frustrated by their failures, the police install their own undercover man in Costello’s operation: Billy Costigan (Leonardo DiCaprio), son of the one upstanding citizen in a mob-connected family. As both Sullivan and Costigan prove exceedingly good at their jobs, tensions mount both in their respective places of employment and in their own minds.

Those who have followed Martin Scorsese’s career through films like GoodFellas and Casino might expect his return to the crime underworld to be a flashy, kinetic affair. Yet while The Departed never feels remotely as long as its two-and-a-half hours, Scorsese is more interested in letting Monahan’s script and the performances do the heaviest lifting. And it’s a blast of a script, at times hilarious when Monahan lets his dialogue percolate with the swaggering machismo of cops. Mark Wahlberg and Alec Baldwin are among those who get terrific supporting roles, snapping off insults and rattling off profanities in a way that makes The Departed far more purely entertaining than you might expect.

But even work as colorful as theirs can’t overshadow the magnificent performances of Damon and DiCaprio. Both seem destined to belong to the Paul Newman Club of actors so good-looking that their talent might not be fully appreciated until they get their subscriptions to Modern Maturity. Yet they’re both in top form here as men so immersed in playing roles that they begin to lose a sense of who they really are. Nicholson gets to be his inimitably showy self—descending into paranoia and curling his eyebrows around speeches about rats—but The Departed belongs to his two young co-stars.

That’s because Monahan has taken roles that were already interesting in their original incarnation and made them richer and more layered. Back-story establishes Sullivan’s connection to Costello as a mentorship going back to his childhood; Costigan’s motivations for bringing down bad guys emerges from his own anger over isolation from his crime-connected relatives. While Monahan wisely hangs on to most of Infernal Affairs’ best set pieces and plot points, the potentially risky changes he does make—like combining the characters of Sullivan’s fiancée and Costigan’s therapist into one (Vera Farmiga), or compressing the time frame so that Costigan is a relative newcomer to Costello’s crew rather than a trusted veteran—almost all pay off.

If there’s one notable exception to that success, it comes at the climax, with a resolution that offers less moral ambiguity than that of its predecessor. It’s an unfortunate dissonant note on which to end, since to that point The Departed feels nearly flawless—an invigorating combination of funny, electrifying and genuinely tragic. Monahan and Scorsese might have known that pitching a remake could get them a green light, but they also knew how deliver something more than a poster concept. If the guys behind the camera have the imagination, it matters a lot less when the guys in the leather chairs have none.

THE DEPARTED

***1/2 (out of four

Starring: Leonardo DiCaprio, Matt Damon, Jack Nicholson.

Directed by Martin Scorsese

Rated R.