MEXICO CITY — The word is "naco," and in the past it usually translated as "tacky," "vulgar" or "cluelessly unfashionable." Depending on who's saying it, naco sometimes can carry uglier associations, as a furtive put-down of people with dark skin and second-grade educations who dwell in distant mountain villages and grim urban slums.

But in Mexico these days, naco (pronounced NAH-ko) is becoming chido ("cool"), thanks in no small part to NaCo., a T-shirt and accessories company that has become one of the country's hottest brand names by declaring that it's hip to be declasse. After all, as the company's directors point out, being naco isn't necessarily a matter of money, education or social position.

"You can be more middle class, poor or rich, and still be naco," says Fernando Garcia, 33, NaCo.'s operations director. "Putting neon lights around your license plate on your Mercedes is very naco."

Other classic symptoms of naco behavior? Clapping at the end of airplane flights. Listening to Kiss, Quiet Riot and others of their ilk. Wearing sunglasses at night. Or, at the other end of the economic spectrum, "wearing all that Versace stuff with gold chains," says company co-founder Edoardo Chavarin, 31, born and raised in Tijuana.

With annual sales topping $1 million and a new licensing agreement with the NBA, NaCo. hopes to open 30 stores in Mexico in the years ahead. A Web site, www.usanaco.com, also caters to U.S. customers.

But the company, with about 25 employees, aspires to do more than sell T-shirts. By retaking possession of a common pejorative and tweaking its meaning, NaCo. is shaking up fundamental ideas about Mexican identity.

Today, instead of meaning trashy or ignorant, naco for many younger Mexicans has come to signify something closer to "kitschy but proud."

Founded in 2001 by Chavarin and Robby Vient, who became friends while attending Art Center College of Design in Pasadena in the 1990s, the company has created more than 300 naco-themed designs.

Many of NaCo.'s early designs used bluntly humorous slogans and relatively simple puns, such as "Ser Naco es Chido" (Being Naco Is Cool) or "Estar Guars," an audiovisual wordplay on the way many Mexicans pronounce "Star Wars."

At first, NaCo. seemed to target mainly Mexicans. But its sensibility has grown bicultural, as reflected in NaCo. slogans such as "Se habla espanol" (Spanish spoken), a phrase more commonly seen at U.S. used-car lots than anywhere in Mexico City. Another declares "Mi Raza Es Tu Raza" (My Race Is Your Race), a twist on "Mi Casa Es Tu Casa" that underscores the shared Mexican-American heritage along the border.

The company's humor straddles a line between playful and in-your-face. "Los Ricos Tambien Roban" (The Rich Also Rob) goes one slogan.

Another new NaCo. series takes a "Sesame Street" approach to the fraught terminology of the immigration debate ("W Is for Wetback," "G Is for Greencard").

Not only is NaCo. comfortable in English and Spanish, it's at home in the terrain that spans the cultures.