FOLLOWING HIS ARREST in 2010 for supporting the movement to oust then-president Mahmoud Ahmadinejad, Iranian filmmaker Jafar Panahi was slapped with a 20-year ban from making movies. In open defiance of that ruling, the 55-year-old director has continued his career, hopefully and despairingly commenting on both his own fate and the fate of Iran.

Those qualities are masterfully threaded through his latest, Taxi, a semi-fictionalized tale that serves as a bitter, beautiful portrait of modern Iran. Taking place entirely within the confines of the titular vehicle, driven by Panahi and shot using a digital camera mounted to the dash, the director navigates the busy streets of Tehran and interacts with a panoply of citizens: a teacher and a thief, who argue the morality of capital punishment; two religiously devout women desperately trying to get to a shrine; a DVD bootlegger defiantly connecting customers with culture both high (he once brought Panahi a copy of Once Upon a Time in Anatolia) and low (he promises a budding film student episodes of The Big Bang Theory).

The most charming and damning moments, though, come when Panahi picks up his niece Hana. The two have an easy rapport, bantering back and forth with the snap of a screwball comedy. In their conversation, she discusses her efforts to make a movie for school, reading off a list of requirements that will ensure her film will be "distributable"—requirements that include no contact between men and women, and making sure the male characters have Persian names. Most crucially, her film needs to avoid what she calls "sordid realism," or the unfiltered, uncensored truth of life. But that sordid realism is exactly what Panahi strives so hard to show—daring to point a tiny camera at the blessings, and sorrows, of Iranian life.