WELLINGTON, New Zealand — The film’s characters, in enormouslikenesses, loom from airport and theater rooftops. Postage stamps, coffee cups and airplanes are festooned with their pictures. Movie-related art exhibitions crowd galleries.

From the tourist industry to the film industry, “The Lord of the Rings” trilogy continues to reverberate through this small island nation. The expected flood of Oscars will only confirm the success that people here have been celebrating for the last two years.

But even as “The Return of the King,” the third and last of the movies made by Peter Jackson, works its way through theaters, New Zealand and its film industry are already scrambling to prepare for the post-“Rings” future.

In December the government approved a grant program intended to attract more movie productions to New Zealand. It will reimburse 12.5 percent of the production expenses of films that cost more than $10 million and that fulfill certain criteria about how the money is spent.

The first to qualify for the grant is a Hollywood version of another story set in a fantasy realm, “The Lion, the Witch and the Wardrobe,” the most popular book in the C. S. Lewis series “The Chronicles of Narnia.” Instead of Middle Earth, New Zealand will star as Narnia. The director, Andrew Adamson, a New Zealander, was co-director of “Shrek” and “Shrek 2.”He is expected to begin filming the live-action production in mid-2004, and if it is successful, more Narnia movies are to follow.

Mr. Jackson, another native son, recently began planning his $110 million remake of “King Kong,” which like the “Rings” trilogy will be filmed entirely in New Zealand.

At Weta Digital, Mr. Jackson’s Wellington-based special effects company, Joe Letteri, a visual effects supervisor, compares Weta with his former employer, Industrial Light and Magic, the powerhouse that George Lucas built on the strength of the”Star Wars” series.

Mr. Lucas founded ILM in 1975 in San Francisco, which at the time was considered light-years from Hollywood. But distance is a diminishing issue, Mr. Letteri said, since fiber optic cables can shrink the distance between Wellington and Hollywood.

“You have a mini Bay Area here,” he said of Wellington, with all of the services but little of the sprawl. “New Zealand is just not as expensive as California.”

The scale of the infrastructure built here to handle the “Rings” movies increases the pressure to find big-budget projects to sustain it.

But other films here don’t have Hollywood-size budgets. The $330 million cost of the “Rings” trilogy dwarfs the estimated $100 million spent annually on production by the entire domestic industry.

“Whale Rider,” the surprise international hit that earned the 13-year-old Keisha Castle-Hughes an Oscar nomination, was considered a big-budget film at about $6 million.

“The Lord of the Rings” trilogy had roughly 100 times as many crew members, estimated John Barnett, a producer of “Whale Rider.”

That disparity goes a long way toward explaining why an entire industry — in some ways an entire nation — is reassessing its future. Yet some New Zealand filmmakers worry that big-budget movies from overseas will drive up production costs and further marginalize the domestic film industry.

“It should never be made a second fiddle,” said Geoff Dixon, a partner in Silverscreen Productions in Wellington. “It has a danger of becoming that.”

Others worry that an industry (and government) overly eager to develop glamorous overseas projects will allow domestic production to wither because of unfair competition for film services. “There’s no point in bringing people here if there aren’t services here,” Mr. Barnett said.

Still, he credits the “Rings” trilogy with giving the movie business a general boost. Others go further.

“The whole perception of who we are as New Zealanders is changing,” said Penelope Borland, chief executive of the New Zealand Screen Producer and Developer Association. Long regarded as pragmatic and down-to-earth, New Zealanders are being seen as creative and even high-tech, Ms. Borland said.”Part of it is the sheer pride in `Lord of the Rings,’ ” she added.

In most places around the country, that pride has not eclipsed pragmatism.

New Zealanders are looking for ways to exploit the trilogy for as long as possible. The government set the tone two years ago by briefly renaming Wellington, the capital, Middle Earth to celebrate the premiere of “The Lord of the Rings: The Fellowship of the Ring,” the first installment of the trilogy.

Now hotels, restaurants and movie theaters offer “Rings”-related promotions, and travel companies hawk “Rings”-theme tours, bolstered by research last year that found that almost 10 percent of international visitors listed “The Lord of the Rings” as one of the reasons for their visit.

In Matamata, Hobbiton, the only remaining set, has drawn thousands of visitors, each paying $33.50 for the short tour. Nearly 200 more come every day.

“Hobbiton has given us the opportunity to jump on the bandwagon,” said Russell Alexander, whose family owns the sheep farm on which the set was built.

Sitting in a cramped office filled with souvenir shirts, pens and key chains, he ticked off the additional tourist attractions he wanted to promote to keep the bandwagon rolling: clay bird shooting, paintball, sky diving and golf.

“There’s no more time for sheep farming,” he said.