-By David D'Arcy

A look at Olafur Eliasson's office in Berlin leaves you thinking that the Danish-born artist of Icelandic parents runs an engineering firm. His staff of 40 includes engineers, architects, and art historians devising logistically complicated projects all over the world. Eliasson's work usually involves the most fundamental of artistic media— water and light—and a scale not accommodated by most museum galleries. Still, museums looking for a challenge and an audience and are vying to exhibit the popular artist's work. So are major cities.

His most ambitious project thus far was The Waterfalls in New York, four cascades that pumped water from the East River to a height of 70 feet and dropped it back down. The main waterfall lay beneath another New York landmark, the Brooklyn Bridge at its foundation in the river near the Brooklyn side.

The exhibition (if you can call it that) ran last summer, and was best viewed on a Circle Line cruise that looped from site to site. For New York, which has long turned its back on a magnificent waterfront, using the East River as a medium was a novelty. For a 41-year-old European to construct his own "Fallingwater," evoking Frank Lloyd Wright's 1937 masterpiece, it was nothing if not brazen. Tourists came by the boatload.

Building anything in New York City is complicated, and the waterfalls were no exception. The idea dated from 2002, said Tom Eccles, then director of the Public Art Fund, which shepherded the project through labyrinthine city construction and environmental regulations. Even on the water and in abandoned shoreline locations, Eliasson's team had to minimize everything from noise to the salt spray that allegedly threatened nearby structures. Neighbors forced him to cut the operating hours in half. Yet the artist and his most important patron, Mayor Michael Bloomberg, fulfilled each other's needs. Eliasson achieved a fantasy project on an unprecedented scale. Bloomberg got a three-month circus, and some $69 million in tourist revenues, on a $15-million investment.

The Waterfalls' success points to a new category oF artistic/architectural work, the grand installation in the grand space. Often the sponsor and beneficiary is a city seeking tourist dollars. And the capital cost is a fraction of that of a new museum building.

While the cascades were conjured out of fantasy and basic engineering, waterfalls had a personal dimension for the artist who grew up in Denmark and Iceland. Almost any journey through the Icelandic countryside involves a stop at a waterfall, and many are on a scale far greater than those that Eliasson built in New York. Iceland's starkly rugged glacial landscape of surging geysers and active volcanoes has helped Eliasson fashion a mythology of otherworldliness. Along with subterranean heat, water is one resource that now-depressed nation has in abundance.

Yet Eliasson's projects inspired by natural forms that defy the proportions of most interiors have found their way into museum galleries. ("Take Your Time," a traveling Eliasson retrospective is currently at the Museum of Contemporary Art in Chicago through the summer.) The most prominent of these museum shows was "The Weather Project" (2003), a transformation of the vast Turbine Hall of Tate Modern in London, where Eliasson covered the ceiling with a reflector and illuminated the space with a "sun" of 800 light bulbs that eliminated all colors except yellow and black. Mist in the room formed clouds. Some visitors studied their reflections in the distant ceiling. Many more just sunbathed.

For its covering of the ceiling of Turbine Hall at Tate Britain, The Weather Project has been called Eliasson's Sistine Chapel. Yet Eliasson was not working as a painter in the style of Michelangelo, but as an architect reinventing an interior space. The Weather Project attracted 2.5 million visitors in a far smaller footprint than London's other millennium structures.

Critics warn that Eliasson plays into the public's expectations of a dazzling "wow effect" in his public projects, with the expectations that each new endeavor will surpass the previous one in scale and spectacle. Indeed, he has been accused—as in the case of The Waterfalls—of exploiting the populism of art as a public circus.

To his credit, Eliasson has resisted that temptation to build bigger and bolder projects, for now. In his collaboration on the 2008 Oslo Opera House (a $800 million project) with the architecture firm Snøhetta, the artist took on a humble task in the building, the design of the partitions that separated the cloakrooms and lavatories from the larger lobby—a division between public and private spaces. His solution was a white wall of light, a geometric grill with diamond-shaped apertures that glowed with shifting colors. The building itself was constructed on the banks of the Oslo fjord, and its stage and orchestra seats were below the water level—one miracle with water for which Eliasson can not claim responsibility.

The artist's latest outdoor project also is restrained. At Bard College, in Annandale-on-Hudson, N.Y., Eliasson has just completed the ambitiously named "Parliament of Reality," a round stone island in a circular pond, which visitors can reach through a passageway covered with tendrils of stainless steel. The work, surrounded by 24 trees, is named for the Icelandic parliament, where Eliasson calls "a space for all things." Stones instead of seats give the Nordic theme an Arthurian feel. Bard and Annandale are one and the same, so political obstacles were few on the $1.5-million project. Eliasson envisions his "parliament" as a gathering place for negotiation and discussion of issues of all kinds. He may find that those problems are more intractable than transforming the landscape.

David D'Arcy is a correspondent for The Art Newspaper (London) and a contributing editor at Art + Auction. He is also a regular contributor to The Architects Newspaper.