t is scarred and fissured and looks from its burnt caramel color as though it's been in a house fire, save for a patch of bone-colored spruce showing through the finish.

   That's where Bill Monroe's little finger wore a crater in the top, just below the fretboard, playing it high and lonesome for well over 50 years.

   The bluegrass master's 1923 Gibson F-5 mandolin, regarded by some as the most important instrument in country music, came out of its vault yesterday and changed hands for the first time since Monroe died nearly five years ago. A newly endowed foundation in Rosine, Ky., paid $1.125 million for the prize, which had been sought by private collectors, the Smithsonian Institution and Nashville's Country Music Hall of Fame.

   Campbell Mercer, executive director of the Bill Monroe Foundation, gave a 10% down payment to Monroe's son, James, with a promise to pay the rest within 18 months. Mercer said 16 donors had contributed to the purchase but would not name them.

   Monroe has long been widely acknowledged as the father of bluegrass, perhaps the only American musician who can be clearly identified as the inventor of a specific popular musical genre. In recent years, his stature has grown, and experts such as biographer Richard D. Smith see his influence on a par with that of Louis Armstrong or Hank Williams. Singer and mandolinist Ricky Skaggs says that is because Monroe was a seminal influence on early rock 'n' roll musicians, including Carl Perkins, Chuck Berry and Elvis Presley.

   Monroe's F-5 Master model, serial number 73987, is particularly important because he played it almost exclusively for more than 50 years, because its design profoundly affected the sound of bluegrass and because it was a particularly fine instrument. Similar models in good shape fetch about $65,000, according to Nashville guitar expert George Gruhn.

   The biography of Monroe's mandolin is almost as varied and colorful as his own. It rode hundreds of thousands of miles on bad highways in spartan vehicles. It has been sat upon, run over by a car, inundated with rain and dropped on its headstock, knocking off the hand-carved scroll.

   It was even the object of one of Monroe's famous feuds. About 1950, he parted with the instrument for its first complete overhaul. Gibson kept it four months, but returned it with only a fraction of the work done that Monroe had prescribed.

   ''He decided he had given the company enough free advertising,'' Smith wrote in his recent book, Can't You Hear Me Callin'. So Monroe gouged out the Gibson nameplate with a pocketknife and refused to speak to the company for years.

   In fall 1985, after Monroe had reconciled with Gibson, a vandal entered his home and smashed the F-5 and another mandolin with a fireplace poker. The stunned musician took both instruments into the Nashville Gibson repair facility in a bag, and a young repairman named Charles Derrington set about sorting out over 500 fragments of wood, discerning which belonged to which instrument.

   Derrington consulted a violin restorer for advice on how to reassemble the fragments.

   ''The smallest were brushed with glue and wrapped to each other with sewing thread, which acted as miniature clamps as the glue dried,'' he says. ''These puzzle pieces were then brushed with glue and fitted into the larger pieces until the body … was back in one piece.'' The work took four months, and Monroe wept when he got it back.

   A Monroe band member once likened the F-5 to ''a fragment of the holy cross.'' It was built by Lloyd Loar, a classically trained musician who went to work for Gibson in Chicago in 1919. His L-series guitars and F-series mandolins became legendary. Loar approved only about 170 F-5s, and Monroe's left the factory July 9, 1923.

   Monroe was already well into his professional music career when he came upon his instrument in a barber shop window in Miami about 1943. He paid about $150 for it, Smith says, and it immediately affected him as a player.

   ''This mandolin clearly had a very special sound to it,'' Smith says. ''It was very versatile. As Monroe pointed out, it cut through the sound of the band, but also if you softened up with gentle tremolo, it had a beautiful tone.''

   Bluegrass was born in the years after that purchase. Monroe's new instrument provided a swinging chop to the beat, while his instrumental breaks on fiddle tunes took on a new assertiveness and speed. Earl Scruggs' banjo and Lester Flatt's singing would round out the band most associated with the birth of the genre in 1946.

   ''Superior instruments are easier to play,'' Smith says. ''If you don't have to fight the instrument, it enhances your playing. This particular mandolin had that quality. In the recordings he made after he acquired it, you can hear his style change. It was so superior and lively it inspired Monroe to even greater heights.''

   ''He said the mandolin never failed him,'' adds James Monroe. ''Everything that he needed, it had it.'' And as famously demanding as Monroe was of everyone and everything, that's high praise indeed.

   James Monroe heard a lot of offers for the F-5 over the years. One guy offered a brand-new custom bus worth a half a million dollars. He consulted Sotheby's about an auction but decided that was ''too big a gamble.''

   And the Hall of Fame in Nashville negotiated through two executive directors but couldn't secure a deal.

   Executive Director Kyle Young said he was disappointed that the Hall of Fame couldn't reach a deal with Monroe, but ''if it can't be in our place, I think it's in a great place. We would love to have it in our collection, but what it came down to was we could not afford it.''

   ''Things have really changed. There's a competitive marketplace out there (for historic artifacts).

   ''What we are going to do is develop for the first time in our history an acquisitions fund. We need to get ourselves in position so that when something else like this comes available, we're prepared.''

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