Daniel Alarcón's impressive first novel, "Lost City Radio" (2007), was set in an unnamed South American country — which may or may not have been Alarcón's native Peru — and dealt with characters emerging from the rubble of bloody civil war and attempting to put themselves back together. His new novel, "At Night We Walk in Circles" (Riverhead, 384 pages, $27.95), has much in common with that debut: Again, we are in a nameless land, in the fallout of conflict; once more we have a small, tight cast coming to terms with the past, grappling with identity, trading the big smoke for rural villages while all the time missing loved ones. However, with this novel Alarcón goes deeper into his characters, excavating past demons and future fears, and spins a darker, more complex and less compromising tale about loyalty and friendship.

At the heart of the story is Nelson, an aspiring young actor who has always longed to join legendary radical theater group Diciembre. He gets his chance, passes the audition and soon embarks on a six-week reunion tour of "frostbitten Andean villages" with the troupe's veterans — founder Henry and assistant director Petalarga — performing their classic, incendiary play "The Idiot President." But things go awry when the trio rolls up in a town that was home to Henry's former prison inmate, Ro­gelio. Unwarranted memories are unleashed and, with them, unexpected truths. It isn't long before Diciembre implodes, Henry reverts to the broken man he was and Nelson goes on the run.

Such is the novel's bare-bones framework. But Alarcón fleshes out his tale with help from a hidden yet omnipresent narrator who gradually reveals his role in the proceedings, even stepping into the narrative as a character. Our narrator is also an investigator intent on uncovering the hard facts surrounding Nelson's back story. Alarcón's novel becomes a patchwork, a splicing of straight narrative with Nelson's journal extracts and snippets of interviews and confessionals the narrator has conducted with the likes of Diciembre, Nelson's mother and his former girlfriend. It is a clever trick that keeps us reading, eager to sift the many fragments and form a cohesive whole.

That's not to say we don't question the validity of the trick. The narrator explains that Nelson was "a young man with whom I'd spent no more than an hour but who had almost come to feel like a version of myself." The problem is that not enough happens in this time for the narrator to undergo such an epiphany, or to go to the bother of compiling Nelson's tale. Equally unconvincing is a soap-opera-like segment in which Nelson agrees to impersonate the brother of a thug to keep sweet his dementia-ridden mother — even though the thug has just beaten up Henry, Nelson's friend and mentor.

Ultimately, though, "At Night We Walk in Circles" is too robust to be significantly blighted by these impairments, and Alarcón's writing is too fluid and mesmerizing to turn us away. So much fights for our admiration, not least the clever allusions between the actors and the characters they play, the powerful portrayals of lives ruined by war and prison, and the evocative, if sobering, depictions of lost love.

Malcolm Forbes has written for the Times Literary Supplement, the Economist and the Daily Beast. Born in Edinburgh, he lives in Berlin.