It's near midnight on a recent Wednesday, but for Antonio (L.A.) Reid, the new CEO of Island Def Jam music--he took over in February--the workday isn't done. He's spent hours with young staffers critiquing music to be released soon on Def Jam, the hip-hop label. He's dancing in his seat and issuing sharp opinions on everything he hears. "I like this record, but sometimes he gets too wordy," Reid says of a cut by rapper Joe Buddens. Despite his take-charge approach, others are openly skeptical about Reid. For one, Russell Simmons, the hip-hop icon who cofounded Def Jam but sold it years ago, worries the stylish Reid may be ill-suited for the scrappy world of hard-core hip-hop. "L.A. Reid is one of the best record men in the business, but he doesn't hang out with [Def Jam artist] DMX. I'm with rappers every day. Managing them is a cultural process," says Simmons. "These are the things that made Def Jam."

Now Reid gets to remake Def Jam in his image. It's a challenging transition in an industry that seems to be perpetually in a state of rough transition, thanks to piracy, shrunken sales and consolidation among major labels. All that turmoil has led to rounds of musical chairs for top execs, and Reid often ends up in the hot seat. He succeeded legendary Clive Davis at Arista Records in 2000. After delivering two best-selling albums--by Usher and OutKast--Reid was fired amid reports that Arista had lost as much as $200 million. But he was soon hired at Island Def Jam after its CEO, Lyor Cohen, jumped to Warner Music. Reid's arrival ignited a clash of management styles, tastes and egos. And he was greeted with the urgent task of bolstering Def Jam's ties to perhaps its most important artist, Jay-Z, and the Roc-A-Fella label he owns with partner Damon Dash. Reid tells NEWSWEEK that Def Jam is close to buying out the partners from Roc-A-Fella and negotiating deals to keep them in the fold.

A lot is riding on Reid's ability to sail through the storm. Over the last 20 years, Def Jam became the most iconic label in hip-hop, with artists like the Beastie Boys, Public Enemy, Jay-Z and Ludacris. Reid's background in R&B and pop, and his more structured management style, make him an unlikely casting choice for the label's free-wheeling, harder-edged culture. But his bosses have given him free rein. "Do what you have to do to make yourself proud," he was told by Doug Morris, CEO of Universal Music, which owns Island Def Jam. "You are L.A. Reid."

And who is L.A. Reid? The Cincinnati native started out as a drummer in a soul band in the 1980s. He and bandmate Kenny (Babyface) Edmonds later became a successful songwriting team, penning R&B hits (33 No. 1 singles). In 1989 they launched LaFace Records, a joint venture with Arista. By 2000 their stars included TLC, Toni Braxton, OutKast and Usher. BMG bought out Reid and Edmonds, and dumped Davis at Arista for Reid. There, he signed a new talent named Avril Lavigne. But as losses piled up, BMG fired him. Strauss Zelnick, the former BMG boss who hired Reid, says: "Hit making is a much rarer skill than bean counting."

Reid says that hit making will be his sole focus at Def Jam, signaling a slight shift in direction for the label. Reid says it's been run largely as a marketing company for the Def Jam brand, which has stood for grimy, honest street lyrics and reverence of the ultraluxury lifestyle. Reid says: "It's about hits and stars." Def Jam, he says, will return to its 1980s roots, when it had more diverse acts, including the politically charged Public Enemy and the mass-appeal LL Cool J.

If Reid could just focus on music, his job might be easier. There's been a stream of high-level departures from Def Jam, and he recently fired Kevin Lyles, the label's president. Lyles and Reid had petty differences, insiders say: Lyles sat in a prime seat next to Chris Rock and Russell Simmons at the recent BET Awards, not several rows back next to Reid. Simmons says it was just a clash of styles. "Kevin didn't know how to report to L.A.," Simmons says. "He was trained to be independent. We had a culture." Simmons, who is hugely influential in the hip-hop community, is unlikely to have a role at the company he cofounded. Two weeks ago he issued an open letter to the music community, in which he voiced concerns about "whether the legacy that Def Jam established will be maintained" under Reid.

Simmons worries that the Def Jam brand may be diluted with smooth R&B stars. "You have to protect rappers from the polish," he says. Simmons may also hold a grudge against Reid and his pop sensibilities. When Reid was at Arista, the label released an album with Run DMC rapping over "Let's Stay Together," a pop classic by Al Green. The song alienated rap purists, and Simmons felt the sting, too, because his brother, Joseph, is a Run DMC member. The question for Reid now is whether he can make that Al Green hit the theme song for his tenure at Def Jam.