This is Dan Rhodes's fifth novel and shares the same elliptical intelligence that was first evident with the brilliant Timoleon Vieta Come Home (2003), which established his reputation as a writer of original and offbeat fiction. Like much of Rhodes's work, This Is Life is a charming and warm-hearted book, full of dark paradoxes and witty ideas and sexual jokes and people you would like to spend time with.

At one pole is the story of Aurélie Renard, a young art student, who is given the unexpected weeklong custody of an eight-month-old baby following an unfortunate pebble-throwing incident relating to the instigation of her art project. At the other is the novel's finest creation: Le Machine, a performance artist who shaves himself to a state of preternatural nakedness and then lives on stages around the world while collecting his every excreta in the finest glassware the host nation can provide. Le Machine's work is called Life and it has just returned to Paris, where the novel is set.

Meanwhile, between Aurélie and Le Machine, a merry-go-round of secondary characters revolves to further delight the reader. There is Aurélie's friend Sylvie, so hot that ex-boyfriends kill themselves in despair and then insist that she attend their funerals dressed in something "too short" and "too tight" in order to sing to their coffins. There's the brilliant critic, Jean-Didier Delacroix, of whom, even in his crib, his parents would inquire: "How is our future little arts correspondent today?" There's Monsieur Rousset, who (tenderly) runs the last erotic cinema of real quality in Paris, at which he shows such aficionado choices as the "1973 Inuit classic Cut Not a Circle in the Ice Tonight".

Rhodes is interestingly concerned with art and the "magic" of art. "It comes back to that word again," explains Le Machine. "Magic. If you are an artist, you must believe you have it." And one of the most appealing aspects of the novel is that its magical-realist tendencies allow for and promote dozens of funny moments  some straightforward, others elliptical.

Rousset's daughter, for example, is a lesbian, but she can't tell her father, "not because she was worried about his reaction nor because she was in any way insecure, but because she knew how much he enjoyed girl-on-girl porn"  and didn't want to ruin it for him. When, gently, she does finally come out, Rousset stares into space and says: "I do love my lesbian porn. You know your old dad too well."

Less well-achieved is the setting. Indeed, given that the novel makes so much of its Amélie-esque Paris (the film haunts the book), there is little of the city that is vivid or memorably brought to life. Rhodes tells us about "the steep and narrow west end of the Rue Norvins" and the "neon lights of Pigalle", but I never felt there.

Also, there is throughout the novel a faintly queasy relationship between the author and his variously attractive lead women: on the one hand, an adolescent male sensibility is at play in the prose; on the other, the cod-feminist demeanour of chick-lit. For example, kooky Aurélie and stunning Sylvie "bond" over "all sorts of things"; later on in the novel, when the wine "kicks in", Aurélie feels "sexy" in her "tight black mini-dress", but ends up "curled up on the bed in her short, tight black dress, a sobbing mess of guilt and shame". Rhodes wants these girls to be liked  by women, presumably. (Don't worry, you poor creatures of callow jealousies and narrow, magazine-fed sensibilities: Aurélie has goofy teeth and asymmetrical ears  you can like her!) But all this unctuous soliciting of likability is patronising and surely just diminishes everyone involved  not least Rhodes himself, who elsewhere deals in such fine phrases as a "choral intake of breath" from the collected onlookers outside Aurélie's apartment.

More than this, I found that ultimately the trick of magical realism did not quite work for me. Even with the various misunderstandings and legerdemain Rhodes deploys, This Is Life is wholly implausible: a fairytale populated by characters from a fairytale. Nothing wrong with that  and there are worthwhile and engaging gains to be had from the form. But the skill with this kind of writing is not in the handling of the magic, it is in the handling of the realism. And for such tales to live beyond the spell of their invention  Kafka, Márquez, some Rushdie  they must somehow resonate in the realistic adult world as well. Still, there are many good things about this novel, and I refer you to the start of this review as to why.

Edward Docx's most recent novel is The Devil's Garden (Picador)

In the opening chapter of his new novel, Dan Rhodes describes a young student in Paris throwing a stone into the air which unfortunately lands on the face of a baby called Herbert (pronounced "Air-bear" in France). This leads to the convergence of many far-fetched stories.

This Is Life appears to mark a very deliberate change in the style and form of Rhodes's fiction. For one thing, it is almost as long as the sum of all his previous novels: Timoleon Vieta Come Home, Gold, Little Hands Clapping and The Little White Car, which he wrote under the name Danuta de Rhodes (the acknowledgments page in this novel gives special thanks "to the true author of this work, the petite, beautiful and forever young Danuta de Rhodes  cruelly felled in her prime"). In one sense this change of tone and focus is similar to that between Michel Faber's short, original and disturbing semi-science fiction novel Under the Skin and the well-crafted, obvious bestseller The Crimson Petal and the White. Does this suggest that Rhodes is also about to move into the bestseller lists?

There is some evidence to suggest this may be in his mind. In one scene Sylvie, a girl with many jobs, sells an admirer a copy of her favourite novel Timoléon, chien fidèle (a translation of Rhodes's tragic version of Lassie Come Home). "I love the ending," Sylvie says. "It's not easy to read, but it says something that needs to be said. I don't think I could ever really be friends with anyone who didn't get this book." And her admirer replies: "I love the ending too. I'm buying it to depress a friend of mine who's been a bit too happy lately." Both of them agree on the author's brilliance and "how underappreciated he was".

Perhaps some readers shuddered when being led into The Anchor, the bleak and oppressive Welsh pub in Rhodes's novel Gold, where a few dull and doleful customers steadily drink their pints of Brains before surrendering to the evening pub quiz at which Septic Barry's local team, "The Children of Previous Relationships", has never won a match (except when the other team failed to turn up). It is even possible, I suppose, that some may have balked at entering the museum where Little Hands Clapping is set. This is a German museum that inspires suicide among its visitors; the caretaker swallows live spiders by night, before superintending the removal of the refrigerated corpses of these suicidal visitors to the local butcher. As for the ending of Rhodes's Lassie novel, the "sentimental journey" which his fictional fans recommend so highly, it is appallingly sad; some sensitive critics have even called it cruel.

Over the last decade Rhodes's fiction has grown darker and more nightmarish, but This Is Life is his farewell to tragedy. It is a happy book about love, from the author of the lacerating short story collection Don't Tell Me the Truth about Love (the epigraph came from Iago's speech inviting us to "Drown cats and blind puppies"). Is he now telling us the truth about love? Or has he become sentimental? It is remarkable indeed for characters in a Dan Rhodes novel to get to the point where "everything was as wonderful as they had known it would be". So love is triumphant; and justice, too, predominates. Even baby "Air-bear", when fortuitously reunited with his mother, loses his italics and regains the romantic dignity of his real name, Olivier.

Inevitably there are some dark notes. The boy who holds his breath for longer than a cormorant can stay under water subsides into an unending coma, and the sympathetic translator, who loves someone who does not love him, goes for solace into a monastery (he does find some comfort, not in the religion of the place, but from the fruit and vegetables he tends).

So what has happened to Rhodes? It is as if Samuel Beckett had suddenly come up with a glorious, high-spirited comedy. The desperate, idiosyncratic characters of his earlier macabre novels are not abandoned, but they are clothed now in a more traditional habit of storytelling that reveals how their craziness arises from understandable and even sometimes admirable origins. The author is generous and forgiving to them. When the art student accidentally shoots the baby she is looking after, Rhodes allows the bullet merely to graze the baby's arm. I tremble to think what might have happened to this baby in his previous fiction.

The comedy is invigorated by some sharp political and artistic irony involving President Sarkozy, Carla Bruni and even (at a distance) Lady Gaga. But grief and darkness are always near. They are most ominously present in the title of the novel, which refers to a theatre presentation of daily routine and bodily functions called Life; this remorselessly shows the characters how much, each day, we leave behind with our faeces and urine and sweat. The "something that needs to be said" in Rhodes's previous novels is that sentimentality is a false medicine bringing little contentment, encouraging disappointment and provoking our vengeance. This novel cleverly avoids such dangerous medicine. It is a reminder of how strange ordinary life is and it challenges us to "adjust to the darkness".

 Michael Holroyd's A Book of Secrets is published by Vintage.