After 50 movies, Jeff Daniels could be living the California dream: Beverly Hills mansion, pool, palm trees and A-list neighbors. But that would mean giving up the ice-hockey pond in front of his Michigan home. "People in Hollywood think it's okay to live somewhere else, but they wonder why I live here," says Daniels, 50, who lives in a three-story house on two acres outside his hometown of Chelsea, which boasts two stoplights and four full-time cops. His reason for preferring farmland to the fast lane? "It's like an old shoe," he says of Chelsea. "It's comfortable. And it's home."

While Daniels has found fame as a character actor in movies such as Terms of Endearment and Dumb & Dumber, he's remained true to Chelsea, a hamlet surrounded by lakes and farms and with a downtown of mom-and-pop businesses like the lumber-and-home-supply store his father has run for decades. "It's Norman Rockwell," says Daniels, who says he's simply happier away from L.A.'s state of mind. It's also where he met his wife, Kathleen, who attended the same high school, and it's where they've raised their kids Benjamin, 21, Lucas, 18, and Nellie, 15, and opened a well-regarded regional playhouse. "He's the guy who walks up with his snow boots on and knocks on my door in sweatpants, a T-shirt and his hair sticking up," says his brother John, 45, who lives next door (parents Bob and Marjorie, both 76, live just down the road). "That's the way I see him."

Audiences are getting a different look. Daniels's recent turn as an odious Brooklyn novelist in The Squid and the Whale has earned him a 2006 Independent Spirit Award nomination and serious Oscar buzz. Daniels's character Bernard "is a person who relishes being on the outside," says Squid director Noah Baumbach. "I think Jeff feels that way." Back in Chelsea, Daniels relishes blending in down at the Common Grill, one of the town's few restaurants.

"Jeffrey walks down the street and he's just an ordinary guy," says his dad. "He stands in the spectator section to watch his boys play hockey. He goes to football games. The star thing isn't Jeffrey."

But growing up in Chelsea in the '70s, Daniels was a star. A high school athlete, he found himself drawn to productions of Oliver! and Fiddler on the Roof. "When we were doing musicals, the whole town was in love with him," says Kathleen Treado Daniels, who met her future husband acting in plays. "I was always the townsperson and he was the lead."

After three years at Central Michigan University, he left college in 1976 to try his luck in New York City. On a visit home, he reunited with Kathleen, and they began dating. "He came over and sat on my porch swing with me for five hours," she recalls. The pair wed in 1979 and returned to Manhattan. There Daniels found success as an actor, first onstage and then in films such as Woody Allen's 1985 hit The Purple Rose of Cairo. Hollywood beckoned, but Daniels, newly a father to Benjamin, decided not to bite. "It's a bit extreme to move back to Michigan after five movies," says Daniels. "But whatever that cost me in terms of opportunity, money, awards, I was willing to sacrifice because we wanted the kids to grow up in a place we knew. Careers in Hollywood rarely last."

But Daniels's career—and his passion for acting—did last. "Living in the Midwest brought back what I fell in love with about doing what I do," says Daniels. Although he flew out to Hollywood for roles, Daniels used newfound celebrity and wealth to found the nonprofit Purple Rose Theatre, a playhouse that attracts 40,000 ticket buyers a year. The theater has helped transform Chelsea's downtown into a cultural district. "The thing my parents taught me was 'leave it better than you found it,'" says Daniels. Around town nobody pays much attention to the local celebrity. "He gets a double skim latte," says Marie-Ann Fody, owner of Zou Zou's coffeehouse. "We treat Jeff like everybody else."

That's how Daniels likes it. At a recent New York City premiere, "somebody asked what I was wearing and I said, 'TJ Maxx,'" he says. "It was not the answer he wanted to hear." While he may need a style makeover around Oscar time, Daniels isn't planning on changing ZIP codes. "I'm the hometown team," he says. "People here want to see me win."

Chris Strauss. Ellen Piligian in Chelsea

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