One of the most distressing times in the life of Oscar-winning filmmaker Ang Lee occurred not long after he had moved to America in 1979.

The director of Crouching Tiger, Hidden Dragon and Brokeback Mountain was born in Taiwan, growing up "on the frontline of the Cold War, very protected and not able to read about the other side", and what he discovered in the US he found truly shocking.

"I realised after all these years that we were the bad guys," begins Lee, now 58. A rueful smile passes his lips. "Things really turned upside down on me when I discovered that. It was actually a little traumatic. It made you second-guess yourself and also your parents."

Lee's parents had moved to the town of Chaochou from mainland China following the Chinese Nationalists' defeat in the 1949 civil war, and his father insisted on a strict, conformist upbringing. "So there were all these so-called white lies," adds Lee. Everything changed in the US. "I began to question what is reality, what can you believe?"

These questions have remained with Lee ever since and it comes as no great surprise to find them bubbling at the surface of his latest film, Life Of Pi, a $120 million blockbusting adaptation of author Yann Martel's enigmatic fable of faith, which was published by Edinburgh's Canongate Books in 2002 before going on to win that year's Man Booker Prize for Fiction.

Part high-stakes adventure tale, part metaphysical debate on the nature of reality, illusion and the power of narrative, Martel's novel seems a perfect fit for Lee, a master of stylised storytelling. "Most people remember the book as fun, because Pi tells such incredible stories but with some realism and with detail that you can prove scientifically," the director says.

"Pi is the biggest bulls****er, but also he's not bulls****ing. The book has its own charm and has a reveal at the end where he's really testing the believability of the unbelievable. Pi examines illusions in the name of religion – although it's not about religion, and more about God and our emotional attachment to the unknown. That's mind-boggling. The book examines illusion and the value of storytelling, and I thought it was something that relates to what I do."

It does indeed. Critics often comment on the variety of Lee's output — he followed his breakthrough movie, 1995's Austen adaptation Sense And Sensibility, with films as diverse as revisionist western Ride With The Devil, superhero story Hulk, spy thriller Lust, Caution, and comedy-drama Taking Woodstock. And yet, despite the wild variety in texts, Lee regularly returns to familiar tropes.

"When I pick on the project I try to go as far away as I can from the previous ones, but somehow you get lost in the middle of it," he says.

"The best idea is up in the air for grabs and you have to ground it. You have to fit in a certain genre or an emotional ride or a pattern so you can communicate with the audience. So it has to land somewhere and it often lands with something that you are familiar with. So you're two steps forward and one step back."

Familiar to Lee's work are examinations of estrangement, marginalisation, inhibition and denial, and he loves an outsider most of all, a product no doubt of his own mixed creative heritage, as a Taiwanese immigrant working in the US.

"My upbringing is very much about reduced dramatic conflict, looking for harmony until you explode," he says with a laugh. "I was brought up that way but then you see a very verbalised culture in the west and I realised that's what I do best – western drama.

"But I always have a weird balance to keep; I cannot lose my cultural roots. If you see Life Of Pi and see my first two films, Pushing Hands and The Wedding Banquet, you see very little in common, but movie by movie you can see something."

With his latest hero – full name Piscine Molitor Patel – Lee thrusts another outsider on to centre stage. Played by the Indian newcomer Suraj Sharma, 16-year-old Pi suffers in school and then in a shipwreck where, wrenched from his family and cast adrift on the open ocean, he endures a soul-rattling journey accompanied in a small life-raft by four other creatures, the most notable of which is a 450lb Bengal tiger known as Richard Parker. It is not a novel that lends itself to a simple, or inexpensive, adaptation.

"In purely cinematic terms, Life Of Pi is by far the most difficult thing I've done," says the filmmaker. "Not only do you have to do the water and work with a tiger but also, how do you examine illusion within movie language? How do you do a big-budget film of a philosophical book and how do you pretend that this is a mainstream movie? It is very difficult."

To help him come to terms with the magnitude of the project – it took four years to make the film – Lee began to think extra-dimensionally.

"The book is not easy to make into a film, because we rely on image so much, but I was intrigued when I was asked to do it. Then it occurred me to shoot it in 3D, which was something I knew nothing about, maybe to open another dimension. Maybe it's not so irrational at all if you have another dimension."

As well as employing 3D cameras for the first time, Lee also oversaw a mammoth construction job as a disused airport in Taiwan was converted into four huge soundstages, and a state-of-the-art wave tank was specially commissioned. "It's a new design to imitate the long wave-length surge in the ocean," Lee explains.

Shooting in Montreal in Canada, Pondicherry in India and Taiwan lasted almost six months, with a further 18 months spent in post-production, working on the digital aspects, the 3D and the editing. While filming in the water proved the greatest difficulty, according to Lee, working with a tiger, which accompanies Pi on a small lifeboat, was no picnic either.

"For a start it was important not to anthropomorphise the tiger because you have to respect the animal, and while we direct the creature in where we want it to go, in terms of behaviour you just have to learn from the tiger – you have to go their way, study them, talk to the trainer and shoot numerous references to make it close to what you want."

It's tedious work. "Two years of effort in total, but the tiger is entirely hand-crafted and in many ways the computer is the stupidest thing. It doesn't think – you have to be very patient."

While shooting Life Of Pi has been his greatest technical challenge — Lust, Caution remains his most emotionally troublesome film to make — Pi has also thrown up new questions for the ever-inquisitive Lee. His two sons are now adults and the director describes himself as at a crossroads.

"Making this movie, I examine what illusions do to people and to me, and I get more introspective. I don't have goals, something to prove, but I am now asking myself how do we exist?"

It's a big question. "Even now you have to ask yourself, is there a good reason to make movies? What do I have to say? Is that necessary? I am in a very doubtful stage right now and I ask myself a lot of questions." He offers another rueful smile. "But is not a bad place to be."

And what, one wonders, has carried him to this place of uncertainty, apart from his children flying the nest? "It's just been a gradual thing, more and more so across the last 10 years," he says, wistfully, "and with this movie especially, because it is about exactly that — maybe there's no point and you have to keep telling stories for as long as you can stand."

That sentiment is certainly one that would resonate with Piscine Molitor Patel.

Life Of Pi (PG) opens in cinemas on Thursday.