After Mercury Rev first hit UK shores a quarter of a century ago, the then-narcotically driven band became known for arguing among themselves, thrashing guitars in the middle of the crowd and even heading for the bar during performances. Only frontman Jonathan Donohue and guitarist Grasshopper remain from that original, unhinged line-up – original singer David Baker having departed after attacking Grasshopper with a spoon – but they haven’t lost their edge.

Setting up on the floor instead of the stage means the band can see into the audience’s eyes while the air around them is filled with smoke, strobes and a crystal clear, pulverisingly loud sound system. The shamanic Donohue walks up to each musician and makes a dramatic hand gesture as if to “Shazam!” them into greater performance. Then he walks out and does the same thing to the audience. “I feel like this is a Roman coliseum and lions will appear,” he says, ominously. “It’ll probably be me who’s going first.”

A line from opener The Queen of Swans – “Years go by, so it seems” – sums them up: mature men who sing about reflection and redemption, but retain a childlike glee.

The marvellous setlist spans their creative arc – from a lovely Car Wash Hair from 1991 to a quartet from new album The Light in You, their first in seven years. Autumn’s in the Air – a reflection on passing seasons performed under an appropriate orange glow – is mesmeric. And there is plenty from 1998’s career-transforming masterpiece, Deserter’s Songs.

If the default mode is magically pretty songs with keyboard orchestras in which dolphins and old horses form metaphors for loneliness and experience, they also rock. Donahue, usually so beatific and entranced he sounds like he would marvel at the existence of a door hinge, even dusts off that old Bono trick of shining a hand-held spotlight into the audience.

In Goddess on a Highway – a majestic hymn to life’s transient thrills – a young couple start formally dancing, upon which Donohue leaps down and the trio trade dance steps.

The symphonic The Dark Is Rising finds the singer dreaming of big crowds, that prove a mirage, but when he stretches out his arms to sing “The words that flow between friends”, the audience spontaneously rise to honour a band who have managed the transition from wildness to maturity, and gained more than they’ve lost.

• At Oval Space, London, 24 November. Box office: 0207-1834 422. Then touring.