During a visit to the Getty Museum in 2001, Alex Prager first encountered the work of William Eggleston, the American photographer who pioneered the use of colour photography in the 1960s with his sublime images of quotidian, mundane scenes. The exhibition inspired Prager to buy a camera and darkroom equipment and teach herself to shoot. Eventually Prager’s own photos would be exhibited at the Getty. And, as Eggleston’s were, her images are now part of the permanent collections of the Museum of Modern Art and the Whitney Museum of American Art in New York.

Prager produces photography and film in high definition, high contrast and high saturation, constructing elaborate and highly stylised scenes that meld the glamour and allure of 1960s Hollywood with the tension and menace of a film noir plot. Her vivid stills feature retro heroines and femme fatales in freeze-framed moments of cinematic melodrama, and owe as much to the street photography of Philip-Lorca diCorcia as the surrealist dreamscapes of David Lynch and the fashion editorial of Guy Bourdin.

Her short films – also laboriously conceived and staged – are set to original and rousing classical music scores (recorded with a live orchestra) or narrated by movie stars such as Gary Oldman. Asked by exhibition attendees several years ago about what had happened to the characters in her photos before or after that moment (“knowing full-well these were fictitious scenes,” she says), her video work is a response to that question. “I looked at film as still images lined up, and moving the viewfinder a little bit to the left and a little bit to the right,” she says. “I was really trying to show these extra moments on either side.”

Prager’s fantastical still and moving works are currently on show in the artist’s first solo exhibition in Australia, which runs at the NGV until April 19.

Friendly and softly spoken with a Californian accent, Prager has sandy blonde hair, dark slate-blue eyes and strong cheekbones. While in her youth she admits to having worn the type of hot pink, retro three-piece suit you might see in one of her photos, today Prager’s look is minimalist and urbane – on the day of our interview she’s dressed in a black t-shirt, black pants and heeled black boots. She has a girlish quality, but there’s also something enigmatic and seductive about her.

Born in 1979 in Los Feliz in LA, Prager left high school at 14 and spent her youth living between LA, Tampa in Florida and Lucerne in Switzerland. Today she lives in Silver Lake, a residential neighbourhood in central LA where Walt Disney built his first film studio, and which, now gentrified, has become home to many of the city’s young artists and creatives.

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“The few times I shoot in other cities I’m always trying to make it look like California, specifically Southern California, and more specifically Silver Lake,” Prager says. “Most of these pictures were taken within a 20-block radius from where I was born and currently live.”

Home to Hollywood and known for its perennially cerulean sky, LA has an inherently cinematic nature that has always consumed Prager’s eye.

“When you walk around LA everything can look very grand and because of the backdrop of the blue sky, it gives you the impression that your dreams can come true there,” she says. “You don’t have to do anything in Photoshop to get the skies to look that perfect – that mix of cyan and perfect puffy, white clouds. But there is an underbelly of seediness and this really dark tone that you pick up in the city the second you start paying attention.”

That dichotomy is Prager’s enduring muse; her meticulously staged portrayals of women on the precipice – emotionally and physically – look beautiful but feel sinister.

Face in the Crowd (the NGV’s newly acquired filmic work) and its associated photographs feel just like that. Shot over four days on an LA soundstage, the series’ cinematic lighting, theatrical costumes and celebrity leading lady (30 Rock’s Elizabeth Banks) typify Prager’s nostalgic Hollywood aesthetic. But unlike her earlier photo series, with their unmistakably Californian texture, these compositions (featuring airports and street crossings and cinemas and beaches) are set in Anytown, USA. Prager’s throngs of people could as easily be in Dallas as Des Moines or Chicago.

Prager’s star rose significantly after she was included in the New Photography exhibition at MoMA in 2010 – public speaking requests and engagements poured in. Face in the Crowd is her reflection on the places and people she encountered on her travels and the extreme emotions she experienced at the time. She wanted to explore how a person can feel disconnected while seemingly connecting with others, and vice versa. “Depending on what kind of mood I was in that day or where I was going, I could feel lonelier than ever,” she says. “Then there was the flipside of that, where if I was in a more curious mood, then I wouldn’t even see that sea of strangers – it would just be about each individual and each aspect of their body and their characteristics and their clothing and where they were going that day.” While Prager’s narratives are clearly fictional, her work represents a distillation of some genuine emotion or feeling – like fear or longing or disconnectedness or love – she herself has experienced.

“I’m interested in taking pictures with an honesty in them,” she says. “I’m not going to take pictures all about men because I just don’t know enough about the inside, secret compartments of a man’s heart, but I know all about that from a woman’s point of view.” She’s also devoted to maintaining a material honesty despite the artifice of her creations. “Every single picture that I take has real components shot in camera, on film. There’s nothing that’s created in Photoshop that wasn’t actually there,” she says to an audience who has come to hear her speak at the NGV before our interview. To prove the point she gestures to a 2009 photo called Molly, in which a young blonde woman is standing at the top of a hill, her blue dress swept up by a gust of wind to reveal white underwear as she peers toward something or someone out of the frame, and a piece of rope dangles in the upper-right corner.

“We hiked with those two bicycles and the rope and the girl in that little dress. It was a 45-minute hike up to the top of Griffith Park. And this one here, with the car,” she says, referring to an image from the same series, called Cathy, “I bought a car and took the engine out of it and had scuba diver stuntmen holding the car in that twisted position under water while I shot the girl.”

The image depicts a naked woman swimming in an expanse of inky blue water, while an old yellow Volvo sinks into the depths beside her.

“All day we were trying to get the car just to the right twist. For 10 hours we were trying to get that position, the car kept flipping and finally in the last 10 minutes of the time I had the permit for in this body of water we finally got the car to stay for a few minutes and the girl was able to get in the water – while it was flipping it was too dangerous.”

It’s a story that perfectly sums up Prager’s fastidiousness. Her pictures are sometimes compared to those by Cindy Sherman, an artist who includes her own image in every single photographic work. The closest Prager gets to that is including her sister Vanessa in each series, but she has no intention of putting herself in the frame. “I need to direct,” she says. “I’d feel anxious not being in control.”

Alex Prager runs until April 19 2015 at the NGV International. Admission is free.