British artist Richard Wilson has an uncanny ability to distort and transform simple objects or materials into surprising and disorientating creations. To date, his reconfigurations include filling a room to waist height with oil, creating a giant rotating section of a building façade and suspending 1200 car parts to a gallery ceiling. As a pioneer of installation art in the 1980s, Wilson’s preference is for large scale phenomenological interventions into which the viewer can become fully immersed, sometimes deliberately risking their safety along the way.

With an international reputation including major Biennales in Sydney, São Paulo and Venice, a huge number of international major public art works and museum shows under his belt and two Turner Prize nominations, the often attached tag as one of Britain’s most famous installation artists seems to have truly stuck. This is not, however, the first time Wilson has exhibited at the Festival; in 1987 he showed his now seminal artwork ‘20:50’ at the Royal Scottish Academy on Edinburgh’s Mound. ‘20:50’ is a waist height room of sump oil — 650 gallons of it to be precise — into which the viewer entered at the RSA via a walkway overhead.

This work catapulted Wilson into the limelight and established him as a genuine pioneer in installation art at a time when the medium was in its infancy. ‘20:50’ is still celebrated today and was recently described as, ‘one of the masterpieces of the modern age’ by BBC art critic Andrew Graham-Dixon. Unexpectedly, the piece has travelled, having originally been shown with Matt’s Gallery on Martello Street in London’s East End in 1987, and most recently in Charles Saatchi’s gallery in London after he bought the work in 2003. It is perhaps the bold simplicity of the work that makes it so memorable but, more importantly, given that the mirror-like qualities of the oil surface reflect back the world around it, the setting of ‘20:50’ alters the work entirely.

In fact, the contexts of Wilson’s projects have a profound effect on their perception. ‘What I actually do is tweak or undo or change the interiors of space and in many instances actually enlist parts of the building as part of the sculpture,’ he says. ‘And in that way I unsettle or break people’s preconceptions of that space.’ But arguably the most powerful setting for ‘20:50’ was its first home in London’s harsh wasteland, where the oil surface seemed to reflect a melancholy industry in decline, in comparison with other slicker spaces which focus more on the spectacle of an upturned world.

Indeed, much of his work does seem to suit the gritty urban nature of abandoned or worn-out sites. ‘Turning the Place Over’, for example, was recently commissioned as a flagship work to celebrate Liverpool’s year as European City of Culture 2008. Wilson used a derelict building as his starting point, from which an 8m diameter disc from the building façade was cut out and mounted on a central spindle which, when placed on a set of motorised rollers and reattached to the original building, allowed the section of facade to turn completely inside out. It is a dangerous and dramatic work, and all the more powerful given the run-down quality of the building.

So, is there an edgier site in Edinburgh for Wilson to show his work this time? The answer seems to be yes. In a derelict warehouse in Old Broughton, just off Barony Street, a site usually reserved for Scotland’s auction house Lyon and Turnbull has been taken up by the nomadic but UK-based Grey Gallery to house a solo exhibition of Wilson’s recent work. During last year’s Festival, the Grey Gallery took up residence in this same space, exhibiting huge scale paintings by Scottish painter Jock Mooney, whose work has a similar preference for the gritty and run-down elements of urban life. The space is vast and cavernous which should suit Wilson’s sensibility, and as Grey Gallery director Susie Honeyman rightly points out, ‘the vacuous white cube is not always the best framework to present art’.

Working with unconventional gallery spaces is an important aspect of the Grey Gallery ethos, as is an emphasis on ‘evolving’ as apposed to ‘emerging’ artists. ‘My own interest lies in what happens to painters, novelists and musicians as they age, and are able to comment on areas of life from that vantage,’ says Honeyman. Her intention is to emphasise how, ‘his work gets more exciting as he gains experience and takes on more daring projects.’ On show will be a range of recent work, including drawing, film and sculpture. The drawings reveal the bare bones of his creative processes and the films relate to either sculptural or architectural works, so are important in extending the lifespan of earlier works.

A prominent film to be shown is shot from ‘Turning the Place Over’. Wilson attached a DVD camera first to one side of the moving façade of the building, recording the view as the façade turned down towards the street, then to the other as it turned into the building, so two separate films were made. The films are designed to be seen on screens side by side, giving us the contrasting and unsettling sense of the revolving motion from the interior and exterior of the building.

Other films relate to some of Wilson’s recent sculptural works, which are more concerned with modes of transport than architecture. These include ‘Meter’s Running’, involving a condensed second hand London taxi, and ‘Butterfly’, featuring a crushed Cessna light aircraft, both of which are set in motion for the films. Wilson says these sculptures, ‘only exist through a dialogue between object and action, between past and present time’. Contrasting with these films is the free standing sculpture, ‘Hot Dog Roll’, a burger van which has been scrunched up like a giant ball of paper. Wilson describes this work as, ‘a moment of sculptural stillness as apposed to the action narrative of other pieces. It is a paradox; the hot dog van seems to have been in a crash but the surfaces of its apparently crashed form are meticulous and unscathed. It suggests a narrative but denies it at the same time.’

Be it engine oil, crushed metal or cut glass, a fascination in the transformative properties of industrial or found materials has remained at the root of Wilson’s practice throughout the years. What we see emerging more recently are a range of explorations into how they can be combined with movement and time, a theme which seems to underpin many of the works in this upcoming exhibition. Though it remains to be seen how the varied works in the show will be installed in relation to one another, and how they will react with the austerity of the exhibition space, we can only expect an adventurous artist such as Wilson to have some surprises in store.

Richard Wilson, Grey Gallery, Old Broughton (off Barony Street), 07910 359086, 1-31 Aug, free.