Sally Rooney’s breakout book, Normal People – more than 1m copies sold in the UK alone – proved her to be a peerless creator of flesh and blood characters with a keen eye for the thrill and complication of sex and desire. Yet despite her success, she has seemed to mistrust her talent, serving up her usual treats in her last novel, Beautiful World, Where Are You – the story of a love quadrilateral – with a side order of self-consciousness, as if she wanted to be the first to do it down.

Unlike BWWAY (as it became known), her new novel doesn’t worry so openly about its value in a burning world, and feels more serious as a result. And not just more serious: Intermezzo is perfect – truly wonderful – a tender, funny page-turner about the derangements of grief, and Rooney’s richest treatment yet of messy romantic entanglements. It’s centred not on a longstanding friendship but two rivalrous siblings, which gives her a heftier shared history to use for emotional punch as well as laugh-out-loud comedy.

Set in Dublin in 2022, from late summer to Christmas, the book follows two brothers: Peter, 32, a lawyer, and Ivan, 22, a chess player (and sketchily employed data analyst), whose progress through the rankings has flatlined since their father, recently dead from cancer, first got ill in Ivan’s late teens. Ivan kicks off the novel’s action when his victory in a comeback event ends with him bedding the 36-year-old venue manager, Margaret, who, as Ivan doesn’t yet know, has an estranged alcoholic husband not quite off the scene.

Peter’s love life is spicier still. He still frequently shares a bed with his former university debating partner, Sylvia, a literary academic. They’re obvious soulmates, but nonetheless broke up, at her instigation, when a road accident left her in chronic untreatable pain that makes sex no-go, a situation the novel treats with unsensational seriousness. Peter’s subsequent promiscuity has come to rest with Naomi, a soon-to-be homeless student Ivan’s age; she makes ends meet with racy online snaps, drug-dealing and the odd handout from Peter – which leaves each of them tiptoeing around the question of whether or not her pliancy in bed is nothing but a survival strategy.

Of the central characters, Naomi is the only one from whose point of view Rooney doesn’t write, switching in unhurried paragraphs between third-person interior monologues from Ivan, Margaret and Peter, whose segments are a seamlessly Joycean flow of thought and speech. See this passage when, after a drunken binge, he passes out at the sight of both his lovers: “Probably dehydrated Naomi says. Like you literally never drink water. I’m surprised you don’t collapse more. She’s sitting at the table he can tell from the directionality of her voice though he can only from here see the ceiling and part of the far wall. Clink of teaspoon also he hears. I don’t know, says Sylvia. I think it might have been the shock of seeing us in the same room together.”

You swiftly get into the groove of the novel’s style, even as it makes you wonder just how much Rooney might have hated being dissed for the glassy simplicity of her prose (much as the focus on two brothers possibly discourages you from parsing Intermezzo as coded autobiography, the way previous novels were). There’s even an appendix making clear which lines the book has repurposed from Wittgenstein, Hamlet, Henry James, Ulysses and so on, but that’s as far as any overt self-consciousness goes this time. Unlike BWWAY’s peculiarly stringent experiment in exteriority, which read almost as if Rooney were watching her characters on CCTV, she leans fully into her gifts here: more characters, more complication, “more life”, as Margaret thinks, tentatively embracing the potential for a relationship with Ivan.

As a plotter, Rooney is a born farceur: when Peter breaks up with Naomi, she’s got nowhere to go, and neither has Ivan’s dog, now that his mother is fed up with looking after it. But their father’s house in Kildare is of course still empty... It’s a coming together waiting to happen and Rooney doesn’t stint on taking advantage. Ditto the potential for ill will in Peter’s disparaging response when Ivan confides in him about Margaret, especially when he sees how his brother is being a hypocrite about age-gap relationships, all of which uncorks a lifetime of bad blood stored up around their parents’ divorce when Ivan was five years old. A rekindling between Peter and Sylvia only makes him more of a hot mess, afloat on vodka and Xanax, yet still able to clinch a headline-making courtroom victory.

What makes Rooney so electrically compelling is the way she sticks with a scene and draws it out, often just the delicate dance of talk between two people in a room (although not just talking, given the characters tumble into bed pretty much every 50 pages). Indeed, the greatest drama here comes from conversations taking place under the pressure of life-changing events in the novel’s prehistory. Not only the obviously big ones, like Sylvia’s accident, but also things like Ivan, still in his teens, silently walking away in fearful confusion when his brother, 10 years his elder, needed a shoulder to cry on. The reader always feels different layers of grief at play – buried pain exhumed by fresh hurt – in a way that rings stingingly true to life.

There’s room in the book, too, for love of so many different kinds: Margaret and her best friend venting about their mothers over lemonades in the pub; Peter going back to his mum, watching telly from her sofa in a daze; Ivan finally taking back custody of his dog. These are tenderly emotional scenes but also very funny, full as they are of little comic touches that persuade you utterly of Rooney’s understanding of people and the world. See the moment when Ivan and Peter separately recall a girlfriend Peter once brought to dinner with her three top buttons undone – a heady memory for both, it turns out.

Is there a better novelist at work right now? It matters not a jot to Intermezzo’s success but you have to wonder why it’s not up for the Booker – not even longlisted. Was it actually submitted in the first place? Maybe its power defies easy summary – “more life”, not spying or space or slavery – but either way, Rooney, author of four books in just seven years, has at this point already created more enduringly memorable characters than most novelists ever manage. And – to mangle a line from the book – she’s, what, 33? Christ.

• Intermezzo by Sally Rooney is published by Faber (£20). To support the Guardian and Observer order your copy at guardianbookshop.com. Delivery charges may apply