  Based on a comprehensive perusal of experimental results, we construct a
microscopic model describing the normal state of layered 4d oxide Sr_2 RuO_4
incorporating relevant quantum chemical features of the material. The high-T
anomalies are explained within a Luttinger liquid (LL) picture. Interlayer
one-particle hopping drives a dimensional crossover to a correlated Fermi
liquid below a scale E^{*} << t_{perp}. Using recently developed
chain-dynamical mean field theory, the low value of E^{*}, as well as various
puzzling features of the low-T normal state are explained as manifestations of
the crossover from the high-T Luttinger liquid state in a consistent way.
