From PEOPLE Magazine Click to enlarge
Don't be fooled by the occasional frill. At heart, Naomi Watts is, she declares, "a total tomboy." She prefers "trousers" to "girlie stuff," she says, and is "not afraid of getting hurt." So it was hardly the thought of being cold and wet that made her fear the long hours she spent holding a fake f decomposing corpse at the bottom of a well during a shoot last year for The Ring. "There was the potential for it to be so corny," says Martin Henderson, who plays Watts's ex in the supernatural thriller. "She'd say, 'Oh my God, Martin, I'm so worried.' "

No longer. Playing a journalist trying to save herself and her young son from a killer videotape—yes, really—Watts, 34, delivers the creepiest 109 minutes of footage since The Blair Witch Project—not to mention $15 million in the film's first weekend at the box office. Just one year after her turn as a twisted lesbian ingenue in David Lynch's Mulholland Drive established her as one of the most talented actresses nobody knew, Watts has emerged as an It Girl with all the trappings: a superstar best friend (fellow Australian Nicole Kidman), a hunky boyfriend (CELEBRITY_LINK "Heath Ledger"], 23, her Aussie costar in the upcoming drama The Kelly Gang) and a brand-new BMW X5. All that's missing is a bigger closet. "I need more room now," says Watts, who will move out of a friend's two-bedroom guest house in L.A. as soon as she finds a home commensurate with her new standing—and her clothing budget. As she says, "The wardrobe has expanded."

Certainly since the days when she wore itchy wool tights to grade school in the tiny English town of Shoreham. Watts is the younger child of Welsh former actress Myfannwy (called Miv), an antiques dealer in Norfolk, England, and Peter, a tour manager for Pink Floyd who was divorced from her mother in 1972 and died in '76. Naomi was "like our mum," says her brother Ben, 36, a photographer in Manhattan, "a bit of a drama queen." The drama between the siblings was typical. One minute, he says, "we fought like cats and dogs." The next, she adds, they were "playing commando and climbing trees together." Then came the day in 1980 when she saw the movie Fame and set her sights on acting. Says Watts: "I wanted to dance on tabletops during math class with leg warmers."

She settled for giving herself "weird haircuts" in high school in Sydney, where the family moved in 1982. That year, at a casting call seeking girls in bikinis, she met 15-year-old Kidman, already a veteran of a few small films. Neither got the gig, but the two became friends. "I was inspired by her," Watts says. After dropping out of school at 17, she landed a few commercials and bit movie parts, followed by a role in 1990 along with Kidman in the Australian drama Flirting. Watts later moved to L.A., only to make such duds as 1996's Children of the Corn IV. Friends say her goofy spirit—and bray-like laughter—never waned. "She's the bubbly optimist, happy to be alive," says Michael Reilly Burke, her costar in the 1996 TV movie Bermuda Triangle. Still, says Watts, "I had major moments when I thought, I'm so far in debt. What am I going to do?"

The answer, she says: "Borrow money." It's a problem as distant now as her bad-perm days. Instead, her main concern is finding time to sip a soy latte with her beau before heading to Memphis to shoot 21 Grams with Sean Penn. "It's very new," she says of her romance with Ledger. "He's a special man." And doing wonders for her.-As Watts says: "I look my best when I'm happy."

Karen S. Schneider
Mark Dagostino in New York and Julie Jordan in L.A.

  • Contributors:
  • Mark Dagostino,
  • Julie Jordan.