Can a gay man and a straight man be friends? Can their sexualities coexist comfortably? These questions, articulated a little more subtly, are at the heart of Edmund White's new novel – his first since 2007's intricate Hotel de Dream.

It starts in the 1960s, well before the Stonewall riots, and ends in the 80s, as Aids begins to devastate gay America. Jack Holmes is a Wasp, forced by his father to go to university in Michigan rather than taking up a place at "pinko" Harvard. He studies Chinese art; the Chinese part of this is a sop to his father's nervous vision of the future. From university, Jack moves to New York, a city that impresses him with its atmosphere of contingency, and he lurches between a somewhat buttoned-up heterosexuality and the shadowlands of gay culture – being allegedly better qualified for the latter on account of his prodigious endowment.

With his readily discernible gifts, "narrow torero hips" and nutmeggy aroma, Jack is of interest to both sexes. But it takes him a decade to express himself fully, as he gradually translates his early sexual somnambulism into a sleek and avowedly homo prowess.

His sexuality crystallises through friendship with Will Wright, a furtive would-be novelist whom he meets while working at a literary magazine. Their rapport is compromised by Will's gawky yet full-throated heterosexuality – which finds fruitful expression in his relationship with teasing, combative heiress Alex – and also by the treacly awfulness of Will's first published book, which he fills with details of Alex's life.

White spends roughly half the novel focused, in the third person, on Jack, before switching to Will's point of view. Now married to Alex, Will regards Jack as a lord of misrule "capable of spreading vice and excitement". He is appalled by Jack's thuggish sex life, yet also vicariously thrilled by it. In a strange twist, Jack sets Will up with Pia, an older woman who gives him an education in lust and an infestation of pubic lice. All the while, brittle Alex lingers off-stage with their fey, asthmatic son and quaintly balletic daughter.

Through Will, White seems to be showing us what he believes is the tangled misery of hetero lives and in particular marriage – the burdens and boredom, deceptions and denials. But Jack is only intermittently more fulfilled. When we return to his perspective, it has a new heartlessness. Typical of this is his whooping delight in the possibility that a friend's lover has a wife who is suicidal. There is only a hint of redemptive warmth in his vision of mature love as "two alligators dozing in the mud".

White is shrewd about social malaise, but is best at evoking the minute particulars of rapture. Early on, he pictures one of Jack's female conquests at university opening up like "a sticky-petalled pink hibiscus". Elsewhere, he diagnoses the "slow photosynthesis" of desire, and a character's penis "looks like one of those mad medieval Japanese heroines in the movies with their pale faces drowned in hair".

But there are times when the tartness and smartness recede. The novel exults in frank sexual chat, and some of it is unconvincing. "Back to sex," says Jack in one of his conversations with Will, as if the subject has ever been dropped. There are stretches of dialogue that dwell on it lazily: "I wonder if that guy is still straight"; "Do you believe in female orgasms?"; "Older women look more like men"; "Gay men hate baby-doll women in short nighties". Here you have to remind yourself that the conversation isn't between two 12-year-olds who have overdosed on porn.

Jack's frame of reference can be alienating. Pondering his enthusiasm for the opaque Will, he reflects that "it was like falling in love with Grover Cleveland". I suspect I am not alone in having no more than the vaguest mental image of this 19th-century American president. Perhaps that's the point: Will is an important figure in Jack's life but not a crisply defined one. Perhaps the analogy has something to do with Cleveland having served two nonconsecutive terms as president: Will's sovereignty over Jack's affections is similarly discontinuous. But only perhaps.

Still, this is an urbane study of the geometry of gay-straight friendship. The subject has been explored by other contemporary writers, notably Michael Chabon, but White brings to it his customary glossy lyricism. He writes supple (albeit occasionally loose-limbed) prose about an age when gay love was often treated with either contempt or flippancy. The result is a book that is engaging and erotic, yet lacks the exuberance and sensuality of his best work – and a sense of urgency.