Living in New York can be an endless series of compromises, which is how Jane Mount, who grew up in Atlanta, found herself buying a fifth-floor walk-up in a tenement once occupied by squatters.

She has not, however, let the difficulty of hauling furniture up four flights of steep stairs get in the way of meticulously decorating her narrow floor-through apartment. Despite her home's size—just 645 square feet—Jane manages to live large, ingeniously squeezing in a king-size bed, a full-size range, and a dining-room table that comfortably seats ten.

"When you have very little space, you can care about every inch," says Jane, 35, an online furniture importer and artist, who bought the apartment in 2005 with her boyfriend, Darko Karas, 38, a Swiss-born graphic designer. "The most important thing was to do the floor plan," she adds.

The key was carving up the apartment—a railroad flat, with each room leading to the next—into distinct spaces with specific purposes. "I love that every zone has its own mood," Darko says.