  We have analysed archival {\it ROSAT} PSPC data for M32 in order to study the
x-ray emission from this nearest elliptical galaxy. We fit spectra from three
long exposures with Raymond-Smith, thermal bremsstrahlung, and power-law
models. All models give excellent fits. The thermal fits have kT$\approx$4 keV,
the Raymond-Smith iron abundance is $0.4^{+0.7}_{-0.3}$ Solar, the power-law
fit has $\alpha$=1.6$\pm$0.1, and all fits have $N_H$ consistent with the
Galactic column. The source is centered on M32 to an accuracy of 9$''$, and
unresolved at 27$''$ FWHM ($\sim$90 pc). M32 is x-ray variable by a factor of
3--5 on timescales of a decade down to minutes, with evidence for a possible
period of $\sim$1.3 days.
  There are two plausible interpretations for these results: 1) Emission due to
low-mass x-ray binaries; 2) Emission due to accretion onto a massive central
black hole. Both of these possibilities are supported by arguments based on
previous studies of M32 and other old stellar systems; the {\it ROSAT} PSPC
data do not allow us to unambiguously choose between them. Observations with
the {\it ROSAT} HRI and with {\it ASCA} are required to determine which of
these two very different physical models is correct.
