We confirm our earlier tentative detection of M31* in X-rays and measure its light curve and spectrum. Observations in 2004-2005 find M31* rather quiescent in the X-ray and radio. However, X-ray observations in 2006-2007 show M31* to be highly variable at times. A separate variable X-ray source is found near P1, the brighter of the two optical nuclei. The apparent angular Bondi radius of M31* is the largest of any black hole and large enough to be well resolved with Chandra. The diffuse emission within this Bondi radius is found to have an X-ray temperature ~0.3 keV and density 0.1 cm[superscript –3], indistinguishable from the hot gas in the surrounding regions of the bulge given the statistics allowed by the current observations. The X-ray source at the location of M31* is consistent with a point source and a power-law spectrum with energy slope 0.9 ± 0.2. Our identification of this X-ray source with M31* is based solely on positional coincidence.Chandra X-ray Center (U.S.) (Contract NAS8-03060)Chandra X-ray Center (U.S.) (Chandra grant GO-6088A)