First Night: Banksy, City Museum and Art Gallery, Bristol

Bristol's global graffiti export returns to his home town, nine years after his last solo exhibition here, to doff his cap to the place it all started.

The Bristle lot are all thrilled, of course, as the queues winding down Queens Road testify. Inside, the first thing to strike you – in keeping with Banksy's style – is the scale, audacity and chutzpah of the thing. This exhibition was kept hush-hush from all but a few until a few days ago: Banksy and his team installed the show in secrecy, with many of the museum's staff (and city council top brass) in the dark until the unveiling. It created a frisson in the city yesterday – not only had the Prodigal Son returned, but he'd slipped in the back door while we were all down the pub.

The sense of awe continues through the museum's well-heeled expanses. Areas that normally house fine art and sculpture have been hijacked and filled with a motley crew of props from Banksy's weird, warped and despairingly comic world. The centrepiece is a life-size ice cream van that has undergone a nightmarish transformation – the supersize cone on its roof has been upended, its panels liberally splattered with graffiti, and it sits in an urban wasteland of battered oil drums and discarded tyres. Not far away, a classical, alabaster beauty stands on a plinth – but this one sports a pencil bra and microshorts, swigs an alcopop and picks her kitten-heeled path through chips, fag packets and takeaway boxes.

Banksy jokes the exhibition is his vision of the future. If so, it's pretty bleak. The Banksy world, while making you laugh, can leave you queasy with its bleak, blasted amorality, its nihilistic urban decay, artifice, greed and putrefaction. But the fact the laughter comes first – what one critic termed his "red-nose rebellion" – is crucial. Clever visual jokes abound, pomposity is punctured everywhere. He has an unerring eye for the prosaic, holes in the utopia, the small print in the dream. A picture of a gorgeous Alpine landscape has its vertiginous snow-capped peak asterisked "subject to availability, for a limited period only". He also subverts great art: in his version of Millet's Gleaners, a peasant women has stepped out of frame for a quick fag, while Claude's Flight into Egypt has a garish hoarding boasting easyJet's Cairo deals. The same humour time and again, beautifully executed and judged. Is it art? I'm not sure. But it's striking, funny and memorable. And for sheer courage, both Banksy and the museum deserve acclaim.