From PEOPLE Magazine Click to enlarge
Katie Holmes is having a moment. At 29, she's the doting mother of a gorgeous toddler, a budding fashion icon, even a marathon runner. And this month, she's back on movie screens in Mad Money, the caper comedy she stars in with Queen Latifah and Diane Keaton. It's her first movie since the event that made her one of the most talked-about women in the world—her Nov. 18, 2006 wedding to Tom Cruise—and in an interview with PEOPLE on Jan. 11, she expressed joy at being a working mom. "I love all these roles that I play," says Holmes. "I've always loved working. I love being a wife, and I love being a mother. I love my life."

That's not to say, of course, that all of it is lovely.

This month, as Holmes hit the media circuit to promote Mad Money and remind the world that Mrs. Tom Cruise is also a respected working actress, an explosive new book was generating headlines. Tom Cruise: An Unauthorized Biography by Andrew Morton makes sensational allegations about Cruise, Holmes and even their child. Neither Cruise nor Holmes have spoken about the book, but his rep describes it as "outlandish and malicious lies." His lawyer, Bert Fields, calls it "clearly libelous," but will not discuss the possibility of legal action. Around the same time, a video of Cruise talking passionately about the Church of Scientology (Cruise and Holmes's religion) was creating buzz as it circulated around the Internet before the church had it removed from YouTube because of copyright violation.

During an interview at a Santa Monica hotel, Holmes—serene and confident, wearing wide-legged pants and her signature sky-high heels—doesn't seem the least bit ruffled by the attacks. Still, friends say it's a safe bet that behind the scenes, she's doing everything she can to protect her family. "Behind all that grace is a tiger," her close pal Jada Pinkett Smith told PEOPLE in May. "She is extremely protective."

Holmes agrees. "There's obviously been a lot that's been said about our relationship," she says with a steely look in her eyes. Explaining Pinkett Smith's assessment of her, she says, "There was stuff in the news about our daughter. That's just not okay. It's something that I don't stand for. I am a mother. I will stand up for my family."

Holmes has been under intense scrutiny since the spring of 2005, when she and Cruise, now 45, embarked on a surprising, rapid-fire romance. "I never thought it was a whirlwind," says Holmes, who's a stepmother to Connor, 12, and Isabella, 15, Tom's kids from his marriage to Nicole Kidman. "When I met Tom, it was like, 'Right on, let's do it!' So I've always felt very comfortable and happy with everything." Says Callie Khouri, who directed Holmes in Mad Money: "There are a lot of benefits that go along with being married to one of the most successful people that has ever lived, but there's an obvious and unending downside." But Khouri also notes, "You get none of that when you deal with her. Nothing but positive energy coming your way, all the time."

That sunny outlook extended to the Mad Money set, where Holmes's generosity was fabled (she bought snowcones, pizza and cupcakes for the crew), and to Cruise's ex, for whom she has only kind words. "I'm so happy for her," she said of Kidman's pregnancy. "It's wonderful."

The Toledo, Ohio-bred daughter of Martin, 62, a lawyer, and Kathleen, 61, a homemaker, Holmes says family keeps her grounded. "We don't like to be away from each other," she says of Cruise and Suri, 21 months. "I spent a lot of time with my mom, one-on-one, growing up; I want to give that to my daughter." So far it's working: Suri's first words were "Mama," followed closely by "Dada." And while she would "for sure" welcome another child, Holmes is in no rush: "We're ready for anything, but we're also enjoying our time now."

That time includes what she calls family "movie night." Over the holidays, the couple had treats flown in from Dylan's Candy Bar in New York for the festivities. On Jan. 13, while in Manhattan, they paid an after-hours visit with Suri to FAO Schwarz, where they spent time "running around and eating ice cream and playing with all of the toys," she told Good Morning America. (Suri's haul included a Curious George doll and a $299 giant world map.) The next night, the trio hit the restaurant Coco Pazzo, where Holmes wielded a camcorder to capture Suri using a grown-up spoon to feed herself soup and Cruise amused his daughter by making funny faces. "She's as beautiful as they come—happy and friendly," says Khouri of the couple's pampered offspring. "Everybody goes crazy over her."

No one more so than Holmes, who loves stepping out with her daughter in matching mommy-and-me bobs and outfits. "You have a baby and suddenly you just start looking at things differently," she says. "You want the best for that person. You want to make them happy all the time." She takes a similar approach to her marriage. "I love being a wife, having that partnership that I've never had before," she says. "It really is something that I depend on." And to those who assume she's controlled by her husband? Don't be fooled, says Pinkett Smith: "Kate is running her own show. Tom don't run nothin' in that house! It is Katie's house. It's her world!"

Still, that world today bears little resemblance to Holmes's existence before she met Cruise, a childhood crush, at a business meeting in early 2005. "Her life changed very quickly," says Pinkett Smith. "She has blossomed." Even Holmes, who still calls herself "this girl from Ohio," marvels at how far she's come since leaving home at 16 to pursue an acting career. She still, in fact, remembers her splurge from her first big paycheck from Dawson's Creek, the TV series that made her famous in 1998: "I bought jeans and a great sweater that weren't on sale. I thought, 'Wow. I don't want to let it go to my head,'" she says. "I still have the sweater. I won't give it up."

Motherhood, however, may have brought about Holmes's most profound change. "When you have a child it feels like you're reading an encyclopedia a day," she says. "And you're always behind because children grow so fast." While controversy follows her, Holmes is looking straight ahead. "I'd love to have more [kids]," she says. "I'm excited to be challenged in other ways. I'm an adventuress, so we'll see what happens next."

  • Contributors:
  • Reported by Brenda Rodriguez/Los Angeles,
  • Scott Huver/Los Angeles,
  • Paul Chi/New York,
  • Jason Lynch/New York,
  • Beth Perry/New York,
  • Michelle Tan/New York.