Atlantic University is located a short distance from the ocean of the same name. Its offices occupy a nondescript white house here, just across the street from the national headquarters of the Association for Research and Enlightenment, the organization created by the legendary American psychic Edgar Cayce (1877-1945). According to information delivered by Cayce in a trance state, the founding members of the group first met on the lost island of Atlantis, many thousands of years ago. It was a place of fabulous wealth and unimaginably sophisticated technology, all of which sank beneath the waves.

It seems a reasonable guess that reincarnated Atlanteans make up a large part of AU's student body. But I do not assume that H.A. Stokely (whose business card identifies him simply as "administrator") will have those particular figures at hand. What he can report is that just shy of 400 people are enrolled in the university's distance-learning program, with about half of them pursuing a master's degree in "transpersonal studies." The university catalog explains that "the key tenets of the transpersonal perspective" include the idea that "consciousness is multidimensional" and that there is "a fundamental oneness to all of life and the universe itself."

I am not prepared to dispute those propositions, but have been wondering how you organize a graduate program around them. As Mr. Stokely provides a tour of the AU offices, I finally ask, "Is it fair to say that 'transpersonal studies' means whatever you want it to mean?"

"In a way, I suppose that's true," he replies, looking amused for a second. But after a moment of contemplation, he grows serious. "Transpersonal studies is an established field, though," he says. "Carl Jung spoke about the transpersonal realm. There is a Journal of Transpersonal Psychology, and work in transpersonal anthropology, and so on."

And indeed, he is right. Later, upon checking the literature, I determine that there are more "transpersonal" scholars out there than you might suppose. Many of them embrace postmodernism's critique of Western rationality, and push interdisciplinarity to its suitably cosmic limits (Derrida with crystals, sort of).

Whatever its epistemological moorings, the AU program is accredited through the Distance Education and Training Council, which is recognized by the U.S. Department of Education. Students at AU take required courses on such topics as "Origin and Destiny of Human Consciousness," while also doing more specialized work on topics like holistic medicine, dream symbolism, or feminine spirituality. Most of the classes must be taken online. But candidates for the M.A. face both written and oral exams held in Virginia Beach. It all sounds as rigorous as any program can be that requires students to "find the wisdom that already resides within them," to quote the AU catalog.

Anyone skeptical about the transpersonal dimension or distance education (or both) might be surprised to learn that Atlantic University did not pop up overnight, like a psychedelic mushroom, following the Internet boom or the discovery of Shirley MacLaine's previous lives. In fact, AU has a long history. Mr. Stokely hands me a computer disk containing digitized images of the original student newspaper, The Atlantic Log, published in 1930-31. From its pages, and from unpublished documents in the nearby library of the Association for Research and Enlightenment, a fascinating story emerges. For there was a time when Atlantic aspired not just to be a brick-and-mortar school, but to leave nearby Duke University in its shadow.

It all started with Edgar Cayce, a mild-mannered fellow possessed of an elementary-school education and a deep knowledge of the Bible, who regularly went into trances during which he prescribed exotic courses of treatment for sick people. These often involved herbs, oils, and various batterylike devices intended to channel energies not known to scientists. A New York Times article from 1910, reporting some miraculous recoveries, made Cayce famous. By the late 1920s, his followers were asking him about spiritual matters and lost civilizations, as well as about their diseases. Two of his most ardent supporters, Edwin and Morton Blumenthal, of New York, were stockbrokers who, it is said, made a killing on Wall Street with advice gleaned from Cayce's "readings."

The elder brother, Morton, dabbled in philosophical speculation on the implications of psychic research. He told Cayce about a dream in which he found himself lecturing on the fourth dimension to an audience of enraptured students. It is not clear who first proposed the idea of starting a university, but the Blumenthals were enthusiastic about it, especially Morton. The brothers had already invested some of their profits in a successful clinic based on Cayce's brand of alternative medicine. Financing a liberal-arts college did not seem like such a stretch.

In late 1929, despite certain recent distractions involving the stock market, Morton Blumenthal found time to recruit AU's first president, William Mosley Brown, the former chairman of the department of education and psychology at Washington and Lee University, in Lexington, Va. The Blumenthals agreed to cover the new college's start-up costs, with the tacit understanding, it seems, that Morton would be made a professor in due course. President Brown began hiring some two dozen faculty members.

When the inaugural class of 275 students arrived in the fall of 1930, construction had just begun on the first two campus buildings. Classes were held in nearby hotels. But as a reading of the Log shows, what Atlantic lacked in infrastructure, it made up for in enthusiasm. A student composed "the rousting, swinging, and peppy song 'AU Spirit,'" which was destined "to become one of the foremost school songs of the country." There was a football team, the Sea Dogs, and a girl's soccer team, the Mermaids. Funds were raised to get a license for the three-legged mutt that became the school mascot, dubbed "Oscar Tri-pod." The Log's gossip column provided evidence that campus morals were going to hell in a handbasket: "What big cluck studying for the ministry had a date with what varsity vamp last Tuesday?"

Nor was scholarship neglected. The professional acclaim lavished upon The Industrial History of the United States by Witt Bowden, head of the department of history and social sciences, was duly noted. The library acquired "an almost complete collection of every valuable work on Shakespeare [published] up to and including 1923" -- some 1,000 volumes, of a quality that "cannot be matched in more than ten or twelve of the large universities in America." (Just where the books were to be shelved, or whether the years from 1924 onward would eventually be represented, is not reported in the student paper.)

While AU's intention to overtake the Ivy League sometime by the late 1930s was evident, there were problems. Although President Brown was a follower of Cayce, he was also canny about making sure publicity for Atlantic played down the psychic's behind-the-scenes role. As it was, the university's effort to get state accreditation seems to have hovered in bureaucratic limbo. Laying the grounds for Morton Blumenthal to receive an endowed chair in parapsychology was not high on Brown's agenda.

But the deepest crisis was fiscal, not metaphysical. As their stocks lost value, Morton Blumenthal and his brother Edwin felt the pinch. Meanwhile, the bills for Atlantic were piling up. The generous faculty salaries were not being paid on time. Indeed, it is not clear they were paid at all, after that first semester. Area merchants agreed to accept payment of only half of what was due them from the university and its faculty. Trustees began resigning, with the Blumenthal brothers the first out the door.

Atlantic limped along until the final day of 1931, whereupon it went into bankruptcy. The semester had not yet ended, leaving students and faculty members stranded in the little beach-resort community. A few professors continued holding classes. Later, students had problems when they tried to transfer their credits to other colleges, since AU had never gotten out of the accreditation twilight zone. President Brown retained ownership of Atlantic's charter. Every few years, someone tried to raise money to revive the university.

None of which amounted to anything for a long time, even when the boom in university enrollment came in the 1960s. But that decade's surge of interest in occultism paid impressive dividends for Cayce's followers. Books about "the sleeping prophet" sold wildly, with the Association for Research and Enlightenment collecting fees for anything quoted from his trance dictations. Virginia Beach became, as it were, the Mecca of the New Age. When Atlantic University revived in 1985, it could count on a steady flow of students who already had their undergraduate diplomas, yet craved both higher learning and attunement/atonement with the universe.

And that brings us back to Atlantis -- which probably had the Internet, although Cayce's readings do not explicitly say so. The prophet did indicate, however, that refugees from Atlantis, arriving in ancient Egypt, stored their records in a chamber buried near the Sphinx. If archaeologists ever discover that library, a degree in transpersonal studies from Atlantic University may become a very desirable credential indeed.