Amy Molloy (Julie) and Stephen Rea (Eric Miller) in Cyprus Avenue
Amy Molloy (Julie) and Stephen Rea (Eric Miller) in Cyprus Avenue
© Helen Murray

We understand the world by association. Our brains make connections, linking labels to experiences, and those connections shape our idea of the world. The process never stops, but it slows as we age. Our brains become hardwired. They can't keep up with the changing world.

Eric (Stephen Rea) is an old Ulster loyalist, living in a Northern Ireland that's changed beyond all comprehension. Sat in a psychiatrist's office, blinking blankly and shrinking into his collar, he looks lost. It's not clear why he's there, but it's clear he should be.

The sort of man who calls a spade, a spade (and a young, black woman, "a nigger"), Eric calls it as he sees it. He deals in definites, too. Presented with his newborn granddaughter, for example, he objects to his daughter's cooing, insisting that there's no way of knowing whether she really is "the best wee baby in the whole of Belfast."

Catholics, to him, are still Fenians. For most of his life, they were the enemy: masked men that might burst into your house and shoot you dead in front of your family. It's hard to reconcile that with peace, as young Catholics and Protestants mix freely.

So, when he takes a closer look at his granddaughter, he gets a shock. She's the spit of Sinn Fein leader Gerry Adams. He draws on a black marker beard just to be sure – one of the most deliciously wicked images in theatre of late – then sets out to sort the situation out.

There's a frazzled lunacy to David Ireland's black comedy. He writes with a McDonagh-ish mischief, toying with taboos and a violent absurdity. This is a play in which balaclava-wearing hitmen burst into Aswad's "Don't Turn Around" and old sectarian songs become lullabies. The play spins itself into a tizz – getting a bit knotted in the middle – until it pops with an altogether unexpected ending.

The brilliance of Rea's performance is that he never lets on until it's too late. He's harmless and confused to start, squinting to make sense of the world, and he shares his suspicions with us like a gossipy fishwife, all conspiratorial relish. As Eric gets more mixed-up, Rea becomes volatile as a blender at full blast and, by the end, he manages to be meek and monstrous at once.

That ambiguity is carefully controlled. Cyprus Avenue is an "avenue of trees" in East Belfast (as Van Morrison put it); so leafy it doubles as urban space and woodland. Ireland argues that contemporary Northern Ireland is similar – both British and Irish at once. For Eric, who built his identity insisting one not the other, that's too much – not least at an O'Neills pub in a London that's embraced all things Irish, despite the IRA bombs of the '80s, for the craic. ("Then came Riverdance…" Eric sneers.) Rea drops to his knees, light-headed with his loss of identity, pained by the erosion of Ulster's culture.

Vicky Featherstone's production plays up the tangy comedy, with Chris Corrigan superb as a gabbling gunman, but it lets the sadness of Eric's situation seep through in its own time with a tender sense of sympathy. Wunmi Mosaku picks her words with modulated calm as Eric's psychiatrist, but, as Lizzie Clachan's muddied cream carpet makes clear, nothing is as neat as it looks. "You have to make peace with the violence inside."

Cyprus Avenue runs at the Royal Court until 7 May.