When Academy Award nominations were announced January 23, Guillermo del Toro’s “The Shape of Water” took home the lion’s share, including Best Picture. Does this mean it will sweep the 90th Oscars on March 4? Not necessarily. But, is it a worthy competitor? The short answer is yes.

During the opening narration, actor Richard Jenkins helps set the film’s fantasy tone by describing it as a “fairytale.” The visuals reinforce this as the audience is guided through an underwater version of the apartment of mute heroine, Elisa (an expressive Sally Hawkins). However, this fairytale is definitely for adults given its level of violence, blood, nudity and sexuality.

In Elisa’s real-world, dry land life, she works at a secret US military lab in Baltimore and lives above a movie theater. The year is 1962 which her neighbor and friend Giles (the ever-engaging Jenkins) says was a time in America when a “fair prince” (President John F. Kennedy) led the country. While this short period in US history is often nostalgically referred to as “Camelot,” events in segregated Maryland and at the secret lab will reveal a sinister element under the era’s shiny exterior.

Elisa lives next door to Giles, a homosexual graphic artist who loves Hollywood musicals and shies away from news of social unrest. At work, her best friend is Zelda (Olivia Spencer, nominated for Supporting Actress for the third time- will she ever have a chance to be nominated in the Lead Actress category?!) who makes up for Elisa’s lack of speech with a running account of events in her own life.

Elisa and Zelda are busy cleaning one of the lab rooms when a top secret “asset” arrives. Elisa is instinctively attracted to the metal and glass tank housing the item, although she cannot see what is inside.

Accompanying the asset is Richard Strickland (Michael Shannon, in a chilling performance), whose creepy heart is immediately apparent. Costume designer Luis Sequeira visually emphasizes Strickland’s evil nature by attiring him in dark suits while one of his adversaries, kind-hearted marine biologist/spy, Bob/Dimitri Hoffstetler (a very sympathetic Michael Stuhlbarg), is usually clad in a white lab coat.

Elisa soon discovers the asset is Amphibian Man (Doug Jones, a frequent del Toro collaborator) brought back from the Amazon for top secret experimentation related to the space race between America and Russia. Reactions to this being are varied. Elisa befriends him. Strickland tortures him, losing two fingers in the process. Hoffstetler is tasked with stealing the creature for the Russians. But instead, like Elisa, Hoffstetler recognizes the asset has intelligence and a soul. These varying views ultimately lead to a showdown.

“The Shape of Water” includes del Toro’s favorite themes of fantasy and monsters. The creature’s collaborative design shares some facial similarities with del Toro’s Fauno character (also portrayed by Jones) from 2006’s “Pan’s Labyrinth.” It additionally pays tribute to Millicent Patrick’s design for the Gillman in 1954’s “The Creature from the Black Lagoon.”  As opposed to that 1954 film, Amphibian Man’s love interest this time doesn’t fear him. Instead, Elisa is attracted to him because, as she eloquently signs to Giles, Amphibian Man is an outsider who, like her, lacks a voice and needs others to champion him.

Loneliness is a quality the characters in “The Shape of Water” share. Despite her friendships with Giles and Zelda, both of whom understand sign language, Elisa’s lack of speech makes her feel different. Giles longs for romance in a time when being gay automatically meant being closeted. Zelda is married but her husband rarely speaks to her. Other than his meetings with his spy boss, Hoffstetler leads a solitary existence outside the lab due to the nature of his work. Strickland, married with two children, is a distant, angry man who only feels secure when controlling and intimidating others.

In “The Shape of Water” del Toro encourages his audience to consider who the real “monster” is. Is it Amphibian Man because he’s different and has a wild nature? Is it Strickland, a racist wielding an electrified cattle prod who views himself as religious and “decent”? Or, is it Strickland’s commanding officer, General Hoyt (Nick Searcy), who politely but firmly bullies Strickland?

In addition to its monster theme, “The Shape of Water” also pays tribute to American movie musicals of the 1930s and ‘40s. Bill “Bojangles” Robinson and Shirley Temple, Betty Grable, Carmen Miranda, and Alice Faye sing and dance on Giles’ TV screen. Faye’s version of the song “You’ll Never Know” becomes Elisa’s love song and is beautifully covered by opera star Renee Fleming over the end credits. While Giles finds solace in classic musicals, Elisa uses them for dance lessons. In a fantasy scene straight out of a Ginger Rogers and Fred Astaire musical, she imagines herself dancing with Amphibian Man and having a voice so she can sing.

A noir ambiance predominates. True to that genre, most of the action takes place at night, in dimly lit labs and apartments. Rain plays a crucial role. However, instead of adding tension or foreboding, this time stormy weather brings hope and beauty, especially as Elisa traces water droplets on a bus window.

Visually capturing the tributes to monster and musical movies are sets by Paul Austerberry. The lab where the amphibian is imprisoned is dominated by the raised pool and tank where he is held. Like so many film villains, Strickland has an elevated, glass-walled office full of security camera feeds so he can monitor all the lab workers. And the dance floor for Elisa’s musical fantasy looks like a replica of a nightclub stage from classic MGM musicals.

Del Toro began conceptualizing this film seven years ago. His plot speaks to themes currently in the news, including racism, sexual harassment, bullying, and religion as a justification for cruelty. There’s also a disrespect for nature, science, and scientists. Hoffstetler, the scientist sent to spy for the Russians, ultimately is guided by an appreciation of nature and the benefits science can bring, putting him at odds with his bosses in both Russia and the American military.

In 2006, del Toro’s “Pan’s Labyrinth” received three Oscars and was nominated for an additional three, including Best Foreign Language Film. In awarding “The Shape of Water” 13 nominations, the Academy appears to be signaling their respect for his creativity and his tributes to classic movie genres. March 4 will reveal whether del Toro’s mash-up of monster, musical, and noir styles has found favor with Hollywood.