Our failings invariably proffer life lessons and we all, as a consequence, learn from our mistakes.

For Glenn Close, however, things have played out a little differently. Sitting in a shabby room at Dublin's Cabinteeley House, which serves as the set for her latest movie, the Hollywood Dame recalls a horrendous moment that brings a palpable anxiety to her small, bird-like face.

"It was one of the worst auditions I ever gave," begins the 65-year-old Dangerous Liaisons and Fatal Attraction star. "I was still auditioning at the time and was up for this stage play and I had a short scene to do where I was playing, in Victorian Dublin, a woman who's dressed as a man and who has been doing it for a very long time."

It's an intriguing premise, sounding akin to a period version of The Crying Game or Boys Don't Cry, perhaps. "I did the scene and I was terrible," adds Close. "I stopped the audition and said, 'I'm boring myself so I must be boring you, goodbye.' And I left. I couldn't stand it. But I heard from my agent that that was the most interesting thing that had happened all day. In the end I got the part."

The part was that of the titular cross-dresser in a stage adaptation of a short story by 19th century Irish writer George Moore, entitled The Singular Life of Albert Nobbs, directed by French theatrical wizard Simon Benmussa. Close's performance, playing a female hotel worker who disguises herself as a man as she goes about her daily routine, earned widespread praise at the time, and sowed a seed in the actor's mind that has only recently blossomed into something even larger. First shown Off-Broadway in New York in 1982 when Close was still an ingénue – even before The World According to Garp – her stage performance earned her an Obie Award.

The character remained in Close's mind across the decades and The Big Chill actor is returning to the part of Albert Nobbs once again, 30 years after her first audition, although this time she's bringing the story to the screen not the stage. Indeed, the film opened in the US last year, earning an Oscar for Best Make-Up as well as a Best Actor nomination for Close. Such is her dedication to the project that Close is both one of the screenwriters and producers on the film, as well as the leading man/lady. Rodrigo Garcia, who worked with Close on 1999's Things You Can Tell Just by Looking at Her, and 2005's Nine Lives, directs.

"The themes are very contemporary although the story is very much of its time, late 19th century, and is very much about the inner life of a person and her problems with identity, erasing herself and living in hiding, as it were," says Garcia, who is the son of iconic Colombian writer Gabriel Garcia Marquez.

"But the story was also about a lot of characters and was very rich and full of drama, which is rare nowadays. Today in a lot of scripts characters talk about their problems. Instead of the audience being told a story, you hear characters bitching. This was the opposite. It has a very laid-out story that unfolds in a beautiful way and you're never ahead of it while you're reading it. Five pages from the end I still didn't know what would happen. It seemed a great challenge."

Garcia is known as a director that understands women, and Close wanted his deft touch for her passion project. "The character has always had huge resonance for me," Close says. "I think that it is one of the truly great characters, and the story, for all the basic simplicity, has this strange emotional power that you have to let take its own course, because it is just there.

"There's something very deeply affecting about the life that Albert's lived. I felt like that from the very start with this character. When we did it on stage the audience just loved it and were gob-smacked at the end. There's an American football term, 'blindsided', where you get hit from a direction you're not expecting and that's what this story does; it blindsides people."

Despite the potential for blindsiding, plus the nods from the Academy, the film made a paltry $2 million from its US release and the filmmakers will hope that a fuller international roll-out recoups some more of the outlay. The film, though independently financed, did not come cheap, packed as it is with worthy names, including Janet McTeer, Brendan Gleeson, Aaron Johnson and Mia Wasikowska all of whom provide admirable support for a beguiling Close.

Each cast member was inspired by Close's passion and commitment. "There's a certain severity, I think, that people associate with Glenn and is true of the way she goes at the work," begins Brendan Gleeson when we chat in a dusty pantry at Cabinteeley in-between takes, "given that she is so meticulous and driven to get the work to a high standard.

"But there is a wonderful lightness about her too, and about what she is trying to achieve. The story is all about heart, and it's a great working environment, one of the best I've been on."

Gleeson says that though the piece is tinged with sadness and is far from showy – "Glenn's not that way" – it is also light and amusing in places. "You can knock quite a lot of laughs out of something that is supposed to be very poignant and sad and tragic, and everybody's been having a laugh," adds the Dublin-born actor.

"I was talking to Glenn about the difficulty of getting independent films made, but when you read this script you can't believe that someone wouldn't jump on the script immediately. It doesn't make any sense to me at all; the script is true, unusual, original and extraordinarily well written and it's got an enormous amount of really, really great actors who are able to take these characters and give them all very quirky, human facets.

"Obviously, Glenn is the mother hen over everything and is the one who's been at it from the very beginning. I just assumed she'd be fantastic, and it says a lot for Glenn's confidence and her innate understanding that you don't have to have a dread-fest to tell a tragedy. In fact the best way to tell tragedy is to find hilarity in it. When people have a twinkle in their eye the tragedy is doubled."

And there's certainly plenty of tragedy: this is 19th century Dublin, a city wracked by poverty, after all. The Albert character has a typically tragic background tale. "She wasn't even told what her name was," explains Close of Albert Nobbs' backstory. "She's an illegitimate child, raised by a woman who was paid to raise her and who never revealed her real name. I figured the woman was paid not to tell. The parents didn't want to be bothered by this child ever again.

"So she starts off with a lack of identity and has no life tools. She's lived in a hotel all of her life. Albert doesn't want to end up in the poorhouse. At this time Ireland was extremely poor and around the corner from the hotel is abject poverty and she knows that without this job, that's where she could end up. And she knows people could get fired any day. There is a sense of fear among them all." For Albert, the fear recedes as her confidence grows, nudged onwards by a twist in the story that sees the timid butler forced to room-share with Hubert, a painter-decorator who, like Albert, possesses an almighty secret. Played by Janet McTeer, Hubert is also a woman. Like Albert, she's elected to live a male life to protect herself from male aggression but the two women inhabit their assumed identities in very different ways.

For Albert, her adopted gender is a cloak of anonymity while for Hubert it has become a pleasurable way of life. Hubert even has a lovely wife. "I was a bit nervous about trying to pass myself off as an Irish bloke, with an Irish brogue," McTeer laughs. "That was a bit nerve-wracking. I think I ended up being a cross between Daniel Day Lewis, Liam Neeson and the Widow Twanky really.

"It comes quite naturally to the character, though," she adds, "unlike Albert who's got dressed up to escape poverty and did it for necessity. Whereas for Hubert there's a sense that she's done it for fun. Hubert is not hiding, specifically, that's just who she is."

McTeer notes that poverty, more than sexuality dominates the story. "There are certain themes in the film, obviously sexuality, but really the biggest theme is poverty and what that does to people and it's why some of the people make the decisions that they make. It's to do with poverty and a lack of education and a lack of choice."

The story is also set in a period that does not have modern labels. "Hubert loves his wife, Kathleen, and she appears as a normal, heterosexual woman," says McTeer. "Who cares what goes on in their bedroom? You can make assumptions but you never find out. It's interesting that this should happen before the labels of 'lesbian' or 'gay' or 'transsexual' or whatever it is."

The story may owe its origins to Moore but the script has been finely honed not only by Close but also with input from Hungarian director Istvan Szabo, with whom she made 1991's Meeting Venus. Szabo worked on an early draft though Close took it back and finished it off with help from acclaimed Irish novelist John Banville.

"I know John Banville has a lot of time for George Moore, who wrote the original story," notes Gleeson. "I don't know John myself, personally, but I was taught by his brother; it's a very small country! He was a complete gent, and I met John on set. I think that John is just an extraordinary writer and having his input, culturally, has been huge. It's typical of Glenn too, to get someone like John. She just goes straight to the top!"

Close smiles. "He was suggested to me by Stephen Frears, and John did a rewrite and a touch-up and brush up, and then I basically took the script back. It became mine but he has been a fantastic collaborator.

"We have more humour in this than the original, for example. And the play I did was very minimalist, but through all these years of trying to sell it I knew where the humour was, even if other people didn't see it.

"The power of the story is like a simple glass of water. Light reflects in a glass of water and it is actually a very complex thing. The story is quite simple but it touches on issues that are so powerful that everybody brings their own life and their own baggage to the story, and then takes away something, too. I am hoping it will be universally appealing. Hopefully other people will agree.

She is writer, co-producer and lead. Is Albert Nobbs the most challenging film Close has made? "Definitely," she says. "The carriage is that she is a very good servant. Servants weren't supposed to make eye contact so that was very much in her favour. There's comportment, the way of moving, with pants that are a bit too long and shoes that are a bit too big, but I think that the biggest challenge for me is lowering the voice and the accent. Thank god we can do additional dialogue recording!

"Really, though, I've always felt that if I could do Albert, with this team," concludes Close, "and now it is done, I guess that I can get on with doing something else with my life!"

Albert Nobbs (15) is released on April 27.