There's one dress that designer Sophie Theallet makes each season that will never see the runway: the one she plans to wear at her show. Each season, superstition overcomes her, and instead she puts on the same pair of black jeans and tunic that she has worn at previous shows. Her show in New York this week was no exception.

Ms. Theallet, who is 46, is an unusual recent entrant to Big Fashion—a designer who is getting her big chance 20 years later than most. Her clothes are worn by Michelle Obama and sold in some top boutiques around the world. Her apparel is so well-crafted, requiring extensive hours of labor and miles of fabric, that a cotton dress might cost upward of $2,000.

"Ruching of chiffon or appliquéing of shearling are not things that are done easily or cheaply," says Robert Burke, founder of Robert Burke Associates fashion consultant. Mr. Burke calls her designs "investment" clothing. "The thing is educating the consumer to understand that," he says.

Ms. Theallet toiled for years for Jean Paul Gaultier and Azzedine Alaia—two famous designers known for the quality of their work—before striking out on her own. Last year, she won the prestigious Council of Fashion Designers of America/Vogue Fashion Fund award, which offers a $200,000 cash prize as well as a lot of publicity. About 160 designers apply for the prize each year, most of them young and looking for overnight success. Other winners and finalists include some hot designers: Proenza Schouler, Derek Lam, Thom Browne and Isabel Toledo.

"I like that she put in the time working with other designers," says Vogue Editor in Chief Anna Wintour, who attended Ms. Theallet's show this week with a phalanx of Vogue editors. Ms. Wintour notes many young designers lack their own clear vision, or the bottom-line design skills to make well-cut clothes. "She can really make a dress," Ms. Wintour says, "unlike a lot of [designers] who can't."

And then there's Ms. Theallet's strict adherence to her vision, regardless of what the rest of the world is looking for. "I don't do trend," she says.

Another hot, new fashion label, Rodarte—whose designers Laura and Kate Mulleavy never studied fashion—commands premium prices for tiny collections. But this is largely because their clothes are often more art than craft—worthy of being exhibited in a gallery. Ms. Theallet's creations are exacting, exquisite from the inside out, and expensive because of the labor involved.

Moments after Ms. Theallet's last look walked down the runway on Tuesday evening, Mr. Burke leaned over in his front-row seat and said to me, "You probably just saw the most sophisticated collection of the week."

The collection drew a room full of fashion heavy-hitters, but didn't touch on a single trend of the week. It was breathtaking for its secretive details, as well as its fine line between the formal and the casual. A green velvet dress shimmered, with a silk-lined hoodie that spread like a shawl collar over the shoulders. The clothes included pencil skirts that looked straight from the front, then revealed tiny pleats at the back, turning a power skirt into something more feminine and slightly flirty.

Short on money, Ms. Theallet doesn't always use the most sumptuous fabrics in her collections. She often works in fine cotton, though she has been able to add knitwear and some Loro Piana wool-cashmere blend fabric this season, using some of her prize money. "I don't have to line the garment because the wool is soft on the skin. It's a beautiful feeling to have that wool-cashmere on the skin," she says.

The seams are flawlessly taped, creating an inside that's as lovely as the outside. The mind boggles at the quantities of fabric she used for a Fall 2010 chiffon dress that was so finely pleated that it looked ruched or gathered.

Some retailers are now fighting for access to the small collections Ms. Theallet makes in a small factory in New York, where the seamstresses create flawless seams, tucks and pleats. Her line is carried in exclusive boutiques, including Ikram in Chicago (where Mrs. Obama shops) and DNA in Riyadh, Saudi Arabia. "I carried her from the beginning," says DNA's owner, Princess Deena Abdulaziz, establishing bragging rights for recognizing a talent before the herd.

The daughter of a doctor and raised in the south of France, Ms. Theallet works from the living room of the Brooklyn apartment she shares with her husband and business partner, Steve Francoeur. With one assistant, Ms. Theallet creates only two collections a year, compared with six or eight for many designers. She will start on her next collection in a few weeks, and it will take until September to complete it. Her husband helps with deliveries as well as serving as the company's business head. The couple reinvest their earnings in the company, which is also backed by friends, including the actor Rupert Everett.

She finished this week's fall collection just three days before her show, then went to work cutting fabric samples and pasting together the sales books for retailers herself.

She's says she knows her recent rise has been a long shot. "Normally it's young designers that get that benefit," she says. "I'm not a young designer. I am a woman and I know what I'm doing."