The best high fives are more than a slap; they linger slightly before turning into an embrace. That’s the kind of high five Sarah Jarosz and Chris Thile shared the final night of this year’s Telluride Bluegrass Festival. After playing with his band the Punch Brothers, Thile, the mandolin virtuoso who rose to fame as a member of the acoustic trio Nickel Creek, took to the lobby of the Sheridan Opera House for an impromptu duet with the 22-year-old Wimberley native and fellow mandolinist he’d helped mentor. Thile has ten years on Jarosz; in 2001, when Jarosz saw Nickel Creek perform at the Old Settler’s Music Festival, in Dripping Springs, and waited in an autograph line to meet him, she was just 10 years old. They both like to tell the story of what he wrote in her program that night: “Let’s jam sometime.”

And here they were, doing just that, closing out the acoustic music world’s most important weekend of the year. The pair stood toe-to-toe, harmonizing on Radiohead’s “The Tourist” and the gospel standard “Where the Soul of Man Never Dies”—an illustration of their shared interest in navigating both bluegrass’s progressive and traditional paths. The show, held just a few weeks after Jarosz graduated from Boston’s New England Conservatory of Music, looked very much like her second graduation—this time from being Thile’s student to being his peer.

“It was a turning point,” says Jarosz. It wasn’t her first Telluride festival, just the first one where the divide between her and her heroes—she also sat in with legends like Jerry Douglas and Sam Bush—didn’t seem so wide. “It was a weekend full of moments where you realize the rest of your life lies ahead.”

What lies ahead is something Jarosz admits to spending a fair amount of time pondering. It’s also something her label—the venerable bluegrass and Americana outlet Sugar Hill Records—wonders about. In an unusual and not-inexpensive show of faith, the label released Jarosz’s first two records while she was still in school and could tour only on weekends and summer breaks to support them. In terms of prestige, at least, the gamble paid off; her debut, 2009’s Song Up in Her Head, was nominated for a Grammy in the Best Country Instrumental Performance category.

Now, after having been a student most of her life—first as an apprentice to other musicians, then at the conservatory—Jarosz gets to decide who she wants to be. “I feel like everybody is asking me what’s next before I really have a chance to find out,” she says a few weeks after Telluride over coffee at Jo’s, in downtown Austin. She seems more amused by the frequency with which she’s being asked the question than annoyed by the tone of it. 

Jarosz’s interrogators may find some satisfaction with the release of her third album, Build Me Up From Bones, a set of songs she describes as both a dissertation on what she learned at school and a template for who she might become. And indeed, if a professor were to scrawl some comments in the margins of the album’s liner notes comparing it with her previous efforts, they might read, “Substantially better singing. More eclectic. More personal.” It’s hands down her most distinctive album yet.

“I knew how I wanted this to sound,” says Jarosz. “I was exposed to so much in school—in and out of what had been my comfort zones—that this really feels like me. It sounds like I hear myself sounding in my head.”

Five years ago, Jarosz says, when she first floated the idea of going to the conservatory instead of a traditional college, some of her closest confidants warned her about losing her identity. “What she started with—her raw, rootsy, natural talent—was so easy to connect to that I worried about her getting too heady,” says Sugar Hill A&R man Gary Paczosa, who is best known for engineering albums by Alison Krauss and Dolly Parton and has produced all three of Jarosz’s records. His concern is understandable. Jarosz started her career as a preteen prodigy sitting in at weekly bluegrass jams in Wimberley, which gave way to camps and festivals across the country, where elite players like Douglas, Mike Marshall, Tim O’Brien, and David Grisman offered young players one-on-one lessons. Many of those players qualify as outlaws of a sort in the world of acoustic music, but the conservatory expanded Jarosz’s range even more radically. Her contemporary improvisation degree included immersion in Eastern European klezmer, Brazilian choro, and avant-garde jazz. 

There is, however, no audible evidence on Build Me Up From Bones that she spent a semester playing compositions by the free-jazz saxophonists Ornette Coleman and Albert Ayler on mandolin. The record stretches her reach, but not far enough to dismay, say, Paczosa. Yes, it includes a left-field cover song—of northern California harpist Joanna Newsom’s “The Book of Right On”—but Jarosz has included at least one on each of her albums, reinterpreting the Decemberists and Tom Waits on her first and Radiohead on her second. 

What is notable, particularly on a gorgeously stark reading of Bob Dylan’s “Simple Twist of Fate,” accompanied only by cello, is how much her formal education has improved her singing. At the conservatory, Jarosz took two years of classes with a voice teacher who emphasized jazz standards. She sang songs associated with Billie Holiday and Abbey Lincoln, helping turn her voice from wispy to weighty. She’s always had a poise that belied her age, but now her singing has a swagger to match. 

Even though it accurately reflects who she is today, Build Me Up From Bones required more of Jarosz than simply holding up a mirror to her talent. She also had to stand up for herself. Paczosa admits that he pushed her toward making a relatively commercial album, partly because he knew this was the first record of her career that she’d be fully able to tour in support of. He hoped for an all-or-nothing swing for the fences, for more dynamics and lusher instrumentation, along the lines of the album’s opener, the decidedly Lucinda Williams–like single “Over the Edge.” Instead, the album is sparse and subtle, featuring cellist Nathaniel Smith and fiddler Alex Hargreaves, a pair of players she met in Boston and will tour with as a trio. And while Paczosa says albums four, five, and six are the ones he’s most excited to work on, he doesn’t view her reluctance to grab the brass ring with this one as an insult or a defeat. “I don’t think she’s ever going to outright conform,” Paczosa says. “I love that when somebody talks about doing something commercially viable, she glazes over. That’s not where her head is. I think that’s a beautiful thing. She’s not chasing. She’s not copying.”

“I trusted my instincts this time the same way I did on the first two records,” says Jarosz. “When I’ve trusted myself, I think people have recognized that and see it has an honest representation of who I am. Why would I change that?”

Jarosz says she also trusts the instincts behind her recent decision to move to Brooklyn. Traditionally, acoustic players move to Nashville, where there’s plenty of lucrative session work to be had and you can find many like-minded collaborators—and, if you’re willing to tweak your sound 90 degrees, you might even land a song on the country charts under your own name. Brooklyn, by contrast, is better known as a magnet for young indie-rock bands, dubstep producers, and jazz musicians. It’s easy to imagine the soft plinks and gentle melodies of Sarah Jarosz being drowned out by the din of crashing guitars or throbbing bass lines. 

But Jarosz, who bucked convention by heading for the conservatory, wants to get pushed out of her comfort zone again.

“New York scares me a little bit, and I love that,” she says. “I graduated, but I’m never going to stop learning.”