In Jerez de la Frontera, in the Andalusian region of Spain spring arrives each year to the clickety-clack of hoofbeats and the flutter of ivory fans.

During one magical week each May, when its shaded patios and squares are filled with the heady scent of jasmine and geranium, this prosperous town blooms afresh. Flamenco-garbed beauties and slender "caballeros" in 19th century riding attire fill the tree-lined parks, arenas and fairways astride high-stepping ponies in a centuries-old equestrian celebration known as the Feria del Caballo, or Jerez Horse Fair.

While lesser known than Seville's April Fair, often cited as Spain's single most photographed event, Jerez' regional festival held this year May 5-12 -- serves up every bit as much pageantry, color and excitement, but on a refreshingly smaller scale.

Part competition, marketplace and exhibition, the Jerez Horse Fair is above all an extraordinary gathering of skilled riders and high-spirited horseflesh played out with great flair and gusto against a backdrop of flowing wine, music and dance -- an exquisitely orchestrated occasion in which these dyed-in-the-wool horse lovers can show off superb Andalusian steeds in a series of races, riding events, auctions, bullfights and colorful parades.

Begun as a livestock market in 1284, today's fair remains deeply rooted in the distinctive history and folklore of this pint-sized parcel of Spanish real estate, located just inland from the Atlantic coast. While recognized throughout Spain as a premier breeding center for fighting bulls and agile, dancing horses, it is Jerez' position as the world's sherry capital, that has won it international acclaim -- "sherry" is an English corruption of the name "Jerez."

Here, under perpetually sunny skies, white palomino grapes flourish in the region's chalk-rich soil to produce one of the world's classic wines. Barrel-aged and systematically blended with other vintages in the airy, above-ground bodegas or cellars of Jerez's well-heeled viticulturists, the sherry is fortified with grape spirits according to one of its 10 classifications before being bottled and shipped by the millions of gallons to worldwide destinations from the nearby port of Cadiz. Most of its exports take the form of sweet sherry, but the favorite in Jerez is "fino," a light, dry variety served as an aperitif.

Over the centuries, sherry has brought fame and fortune to a dozen or so of its producers -- Harvey, Osborne, Ruiz-Mateos, Zoilo, Gonzalez Byass and the Domecq concern, which markets its product in North America under the popular La Ina brand. But if sherry making is their business, horse breeding, training and exhibition are the true passions of Jerez's first families. It is a legacy that dates back hundreds of years to Spain's Cathusian monks -- generally credited with developing the first Spanish horse, the cartujano, which today bears their name.

Originally a mix of Moorish/Berber and Nubian stock, the cartujano's bloodlines go back to the Arab occupation of the Iberian peninsula begun in the year 711. Agile, even-tempered and strong, this horse was chosen by Austria's Emperor Maximilian II for the original breeding stock of the now-famous Lipizzaners of the Spanish Riding School of Vienna, founded in 1562.

Considering Andalusians' reverence for fine horses, it is ironic indeed that their own school of classical riding should have had to wait more than four centuries -- until 1973 -- to be formed. Yet the Escuela Andaluza del Arte Ecuestre (or Escuela del Arte, as it is commonly called) already has won a reputation as one of the world's finest professional riding schools and a major promoter of the Spanish horse.

Not surprisingly, it also has become one of the region's leading tourist attractions, with its colorful weekly performances of the "Dancing Horses of Andalusia," a delightful display of precision riding which marries horse and horseman in the intricate moves of a harmonious ballet.

Much of the school's reputation can be traced to the efforts of founder/director Alvaro Domecq, a prize- winning equestrian, rejoneador (bullfighter on horseback) and scion of the well-known sherry-making clan. He personally raises the school's spirited equine performers on his 7,000-acre estate, Los Alburejos, just outside Jerez, and oversees their daily training sessions as well as the now-famous dressage exhibitions.

But demonstrations of equestrian excellence are not limited to the Escuela del Arte, especially during the Jerez Horse Fair. Displays of precision riding dating to the 18th century, races and other such events take place during the weeklong Jerez Horse Fair, drawing top breeders and buyers from across the globe.

A good place to view these dramatic competitions is from the grandstands of the city fairgrounds, where things begin to stir come mid-morning as riders and drivers prepare for the afternoon's events. By noon they stand at the ready, on single mounts or in horse-drawn wagons and carriages, awaiting their turn at the series of routines to be performed under the gaze of local judges. By week's end, a number of such contests under their belts, one of these master equestrians will be awarded the prestigious Caballo de Oro, or Golden Horse Award, as the fair's outstanding competitor.

As the afternoon wanes, in another part of town hundreds of spectators flood arena seats for a look at Spain's favorite spectacle, the bullfights. In the Andalusian enclave of Jerez, this age-old ritual is fought in both the traditional manner and on horseback in a method known as rejoneo, pitting the bull's ferocity and bravery against the speed and agility of specially trained cartujanos who act on their riders' voice commands.

But for a chance to experience the real theatricality, vitality and popular spirit of the fair, there is nothing to equal an afternoon visit to Gonzalez Hontoria Park, a short distance from the fairgrounds. A city landmark, it recently was refurbished with new landscaping and elaborate overhead lighting to accommodate more stylishly this celebration's favorite pastime: promenading. On foot, on horseback or aboard an astounding array of horse and mule-drawn fiacres, gigs, victorias and surreys, the parade flows far into the night in a constant explosion of color and energy.

Darkly handsome men in broad-brimmed hats and traditional trajes cortos, or short-jacketed suits, sit proudly astride Andalusian mounts shuttling back and forth along the park's graded pathways. Seated behind them, elegant young women in brilliantly colored, ruffled dresses and fringed shawls strain to keep their precarious positioning without benefit of saddles.

Intermingled in the stream of traffic, dozens of open carriages and wagons ferry costumed revelers around the park, stopping now and again to change passengers. Their matched teams of horses and mules dance with the color of harnesses festooned in bright yellow, red, green and blue tassels. From the sidelines, old and young take in this resplendent tableau of equipages and equestrians with a mix of delight and amusement while strolling the course or chatting with friends at one of the public or private casetas (pavilions) that line the main thoroughfare.

About an hour's drive from Seville by expressway, Jerez is located in the province of Cadiz between the Costa de la Luz and Costa del Sol. Clean and well-manicured, this company town of 200,000 can be seen easily in a day or two with visits to its historic bodegas and treasure-filled churches, convents and palaces. Of special note are the Iglesia Colegiata in Plaza Encarnacion, the 15th century Church of Dionisio, with its fabulous baroque altar, and the Museo Arqueologico. The latter two are located in Plaza Asuncion.

Performances of the Andalusian Dancing Horses take place every Thursday at noon year-round at the Escuela Andaluza del Arte Ecuestre. Admission to the hourlong show is about $10. The school also welcomes visitors on a daily basis from 11 a.m. to 1 p.m. for a view of the stables and practice sessions.

All the major wine concerns regularly open their operations to inspection and wine tasting by visitors, free of charge. That includes the historic Domecq concern, El Molino, where sherry botas, or casks, still carry the names of the first Pedro Domecq and his partners, Telford & Ruskin. It's located at Calle San Ildefonso 3; telephone 33 18 00.

Others houses that welcome visitors include Gonzalez Byass and Co., M. Maria Gonzalez 12, telephone 34 00 00; John Harvey and Sons, Calle Alvar Nunez 53, telephone 34 60 00; Garvey, Guadalete 14, telephone 33 05 00; and Emilio Lustau, Plaza del Cubo 4, telephone 34 15 97.

As a rule, bodegas are closed on Sundays and holidays, and during the Fiesta de la Vendimia harvest celebration in the early part of September. In any case, it is a good idea to write or call ahead to ascertain the visiting hours of individual operations and to insure the availability of guides.

For more information on the Jerez Horse Fair, the Escuela Andaluza del Arte Ecuestre, sherry bodegas and the town of Jerez, write the National Tourist Office of Spain, 665 Fifth Ave., New York, N.Y. 10022; or telephone (212) 759-8822.